Erratic Rainfall Raises Alarms for Second Consecutive Year of Sugar Production Drop
As India faces a ban on rice exports to control domestic prices, another critical staple, sugar, emerges as a potential concern. Global sugar supplies have increasingly relied on India, but uneven rainfall patterns in the country’s agricultural regions raise fears of a second straight year of production decline starting October.
India’s move to restrict overseas wheat and rice sales for domestic supply protection has ignited concerns about potential sugar export limitations. Experts suggest that the government might adopt similar measures for sugar, further impacting global food markets already affected by weather disturbances and geopolitical conflicts.
Crop stress due to inadequate rainfall in Maharashtra and Karnataka’s sugar cane fields has led to a projected 3.4% drop in sugar output for the 2023-24 season, as per the Indian Sugar Mills Association. Despite this, domestic demand is expected to be met.
While the country diverts more sugar for biofuel, concerns loom over potential export restrictions. Experts anticipate prices could trade between 25 to 27.5 cents per pound in the upcoming season due to supply constraints from various regions.
The Indian government’s decision on 2023-24 sugar export quotas is pending. Officials intend to wait for full production visibility, given that the harvest begins in October. Industry experts emphasize the need to monitor the situation closely for any potential market impact.