India's Sugar Production to Fall 8% Due to Dry Weather, Impacting Global Prices

The decline in India's sugar production will likely have a ripple effect on the global sugar market. India is the world's second-largest producer and exporter of sugar. A fall in Indian sugar exports could lead to higher global sugar prices.

The decline in sugar production is also a concern for other sugar-producing countries, such as Brazil and Thailand. These countries may need to increase their production to meet global demand.

The Indian government is likely to take steps to mitigate the impact of the decline in sugar production on domestic consumers. The government may import sugar to meet domestic demand and keep prices under control. The government may also provide subsidies to consumers to help them afford sugar.

India's sugar production is expected to fall by 8% in the 2023/24 marketing year (starting October 1) due to insufficient rainfall in key sugar-producing regions, according to the Indian Sugar Mills Association (ISMA). This is a significant downward revision from ISMA's previous estimate of 36.2 million tonnes.

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The dry weather conditions in Maharashtra and Karnataka have had a significant impact on the sugar industry. Maharashtra is India's top sugar-producing state, accounting for over one-third of the country's total output. Karnataka is the third-largest sugar-producing state. In the preceding season, which concluded on September 30, India had authorized sugar mills to export only 6.2 million metric tons of sugar.

This was a significant reduction compared to the record 11.1 million tonnes permitted for export in the 2021/22 season. As a further indication of the industry's challenges, India recently extended its restriction on sugar exports beyond October.

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The global sugar market is also likely to be affected by the decline in India's sugar production. Global sugar prices are likely to rise, which could benefit sugar producers in other countries. While the sector navigates these uncertainties, stakeholders must monitor the evolving situation and adapt to the changing dynamics of the market.

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