India's cane crop is suffering, thus the trade association expects an 8% drop in sugar production

 India's cane crop is suffering, thus the trade association expects an 8% drop in sugar production

The second-largest producer of sweeteners in the world may decide not to assign export restrictions in response to lower sugar output, which would help sustain the multi-year highs in global prices.

When the cane crop struggles, India prepares for an 8% drop in sugar output: Trade association

The 2023–24 marketing year, which begins on October 1, is expected to see an 8% decline in sugar output in India, according to a major trade association, as reduced rainfall in main producing states may reduce yields.

The second-largest producer of sweeteners in the world may decide not to assign export restrictions in response to lower sugar output, which would help sustain the multi-year highs in global prices.

The Indian Sugar Mills Association (ISMA) released a statement in which it said that "sugar production for 2023/24 has been anticipated at around 33.7 million tons, compared 36.6 tons estimated for 2022/23, without taking into account diversion towards ethanol."

36.2 million tons of sugar were expected to be produced this season, according to ISMA's August prediction.

The trade association said that the output would be more than the nation's yearly consumption of 27.85 million tons of sugar, but it did not offer an estimate for net sugar manufacturing after the diversion of dextrose for ethanol production.

According to the ISMA, estimates of the amount of sugar that will be converted to ethanol won't be made until the government releases the yearly ethanol purchase price.

According to a Mumbai-based dealer with a worldwide trading firm, sugar mills diverted 4.1 million tons of sugar for the manufacturing of ethanol in the previous marketing year, and a similar allocation might reduce the current season's output to 29.6 million tons.

"It's clear today how the dry weather has affected Maharashtra and Karnataka. The government is unlikely to set export quotas, and there won't be enough excess for exports," the trader said.

After a shortage of rain reduced cane production, government sources in August informed Reuters that the South Asian nation will prohibit mills from exporting sugar during the season starting in October, suspending exports for the first time in seven years.

India only permitted mills to export 6.2 million metric tons of sugar in the most recent season, which concluded on September 30, after allowing them to sell a record 11.1 million tonnes in 2021/22.

Earlier this month, India decided to prolong its ban on sugar exports beyond October.