India’s sugar production is likely to fall 8% to 33.7 million metric tons in the 2023/24 marketing year, which starts on Oct. 1, a leading trade body said on Tuesday, as lower rainfall in key producing states could dent yields.
Lower sugar production could lead the world’s second-largest producer of sweetener to refrain from allocating export quotas and support global prices, that are trading near multi-year highs.
The trade body did not provide an estimate for net sugar production after the diversion of sucrose for ethanol production, but it stated that the output would exceed the country’s annual consumption of 27.85 million tons.
The diversion of sugar towards ethanol will be estimated only after the government declares the annual ethanol procurement price, the ISMA said.
“The impact of the dry weather in Maharashtra and Karnataka is quite evident now. There won’t be enough surplus for exports, and the government is unlikely to allocate export quotas,” the dealer said.
Government sources told Reuters in August that the South Asian country would ban mills from exporting sugar in the season beginning in October, halting shipments for the first time in seven years, as a lack of rain had cut cane yields.
In the last season that ended on Sept. 30, India allowed mills to export only 6.2 million metric tons of sugar, after permitting them to sell a record 11.1 million tonnes in 2021/22.
