Sugar output in India, which vies with Brazil as the world’s top grower, will likely drop to a three-year low next season as dry weather in some main areas of western region cuts planting.
Production may slide to less than 30 million metric tons in the year that begins on October 1 from an estimated 31.5 million tons this season, said Prakash Naiknavare, managing director of National Federation of Cooperative Sugar Factories Ltd. India produced a record 32.5 million tons in 2017-18, according to the Indian Sugar Mills Association.
A shrinking harvest will
potentially cut overseas shipments and support global prices that fell 21% in 2018 on concerns over a supply glut. India swings between being a sugar importer and exporter, depending on the size of local output.
Sugar exports may total 2.5mn to 3mn tons in the year ending September 30 compared with a government target of five million tons, Naiknavare said. “The export window will close before Brazil’s new crop reaches the market” in March-April, he said. An increase in minimum sale price of sugar will also slow down exports, Naiknavare said.
“A drought in some parts of Maharashtra discouraged planting,” Naiknavare said in an interview by phone on Monday. “Looking at the pace of planting, it seems that the area under sugar cane will go down.” Some areas in the southern state of Karnataka, the country’s third-biggest grower, also suffer from drought, he said.