India's sugar output is set to decline next season as El Nino induced dryness threatens the harvest that begins next month, further tightening supplies in the world's second-biggest producer.
Gross sugar production will range from 29 million tons to 31 million tons in the year through September 2027, according to estimates from 11 traders, analysts and millers surveyed by Bloomberg. That compares with 31 million tons for the current season, the Indian Sugar and Bio Energy Manufacturers Association has forecast.
The strengthening El Nino is expected to hit harvests across Asia, contributing to a global deficit of roughly 260,000 tons, the International Sugar Organization warned in May. Monsoon rainfall, on which the Indian crop depends, is currently running about 15% below normal. Expectations of less output in the 2026-27 season have helped push raw-sugar futures up about 30% in New York this year.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
India, the world's largest consumer of the sweetener, last month allowed mills and refiners to import duty-free raw sugar to tame record-high domestic prices. It also imposed stockpile-holding limits on dealers and bulk users.
"The country may need to import sugar next year to build up its closing stocks," Yatin Wadhwana, a director at commodity trading and advisory firm Gradient Commercial Pvt. said on the sidelines of The India Sugar & Bio-Energy Conference in New Delhi this week. "Current domestic sugar prices are likely to encourage mills to produce more sugar rather than ethanol."
Six respondents in the Bloomberg survey said there would be no diversion of sugar into ethanol, while five said India may need imports for a second consecutive year to rebuild pipeline stockpiles.
India may begin importing sugar as early as July next year to rebuild inventories after the current quota is filled, with production expected to decline further in the 2027-28 season, said Claudiu Covrig, lead analyst at Covrig Analytics. Inbound shipments may total 2 million to 3 million tons, he said.
The government has urged sugar mills to keep prices reasonable and ensure adequate supplies during the festival season this year, Ashwini Srivastava, joint secretary for sugar at the food ministry, said Thursday.
Authorities will keep a close watch on sugar prices and begin tracking production on a monthly basis, Srivastava said, in a move aimed at improving supply forecasts and policy decisions.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
