India’s sugar production will be outstanding next season
In the 2023-34 season (October 2023-September 2024), the US Department of Agriculture (USDA) projected that there will be an increase in India’s sugar production by 4 Million Tonnes (mt) to 36 MT.
The USDA in its bi-annual “Sugar: World Markets and Trade” report said that, “India’s production is estimated up 4 MT to 36 MT on higher sugarcane area and yields. Consumption is anticipated to be up on increased demand from bulk buyers and processed food manufacturers”.
ISMA’s estimate was 32.8 MT and it will come up with the project
The Indian Sugar Mills Association (ISMA), a body of private mills, estimated India’s sugar production in the 2022-23 season has been estimated at 32.8 MT, down from 3.8 MT. Unseasonal rain is affecting production in the state of Maharashtra and Karnataka. ISMA will likely come up with its projections on 2023-24 sugar production in July.
We have enough sugar in the country – Tarun Sawheney
Vice-Chairman and Managing Director of Triveni Engineering and Industries Ltd, Tarun Sawhney who owns seven sugar mills in Uttar Pradesh, said – “El-Nino might have some impact, but from a sugar perspective, I think we will still have surplus sugar in the country. We will have enough sugarcane to meet the ethanol blending programme and we will have surpluses,”
India capped sugar exports to ensure ample supply in the domestic market. In 2021-22, exports were capped at 10 MT, though eventually 11.2 MT were shipped out. This season, exports were capped at 6 mt. “If India does not export sugar next season, global prices could go up substantially,” said Sawhney.
BMI said about El-Nino effects in Asian countries may have consequences
BMI is a research agency which is a unit of Fitch Solutions. It said in India, on average, a climatic shift to El Nino brings about below-average precipitation levels during the monsoon season. Unlike all the time, it said – “Looking at India’s sugar output during a strong El-Nino 2015-16, domestic production declined sharply, falling by around 10%”.
In Asian markets sugar’s output is affected, including Thailand, where output was also decreased by approximately 10% during the last strong El Nino, it said. It also enlightened major sugar-producing countries that a transition to El Nino could have significant consequences in sugar production.
Global indications
Sugar production in Russia is declining, but higher production in Brazil and India is more than sufficient in offsetting Russia’s decline. The USDA mentioned in its report and said global sugar production is forecast to up 10.6 MT to 187.9 MT.
International sugar broking firm Czarnikov’s portal Czapp has projected the commodity’s production next season at 178.8 mt. This is lower than its April estimates as it expects El Nino to affect the crop in Thailand.
If weather conditions are good enough then there could be a 6.9 mt sugar surplus in 2023-24 , BMI forecasts. The strength of the looming El Nino remains unclear to BMI till now.
Globally demand for sugar is rising to 180.04 MT. This will leave ending stocks at 33.45 mt. Czapp sees consumption outstripping supply at 178.9 mt. Indian demand is projected to top 31 MT by USDA, while it may export 7 mt against 6.1 mt this year.
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