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May 28, 2024

India’s Sugar Export Prospects Tied to Monsoon and Cane Sowing Amid Expected Lower Output for 2024-25

India, the world’s second-largest sugar producer after Brazil, is closely monitoring its sugarcane sowing and the impact of the monsoon season before making decisions about sugar exports for the 2024-25 season. Industry sources predict that the country’s sugar output will decline to 30 million tonnes, a significant drop from previous years, prompting careful consideration of export policies.

For the current 2023-24 season, which concludes in September, sugar production has reached 31.5 million tonnes. This figure is expected to rise to 31.8 million tonnes as mills in Tamil Nadu and Karnataka complete their crushing operations. Last season, India’s sugar output stood at 32.8 million tonnes, indicating a downward trend in production.

The anticipated decrease in the 2024-25 season’s sugar production is largely attributed to reduced sowing in Karnataka, a key sugarcane-growing region. Trade estimates suggest that this reduction in sowing will significantly impact overall output, leading to the projected 30 million tonnes.

The potential decline in sugar production has led the industry to advocate for the export of 1 million tonnes of sugar. However, the government’s priority remains securing sufficient stock for domestic consumption and ethanol production. A source within the industry explained, “Since we are expecting lower sugar output next year and stocks are required for ethanol production, the priority of the government is to ensure available stock for domestic consumption as well as for ethanol. Exports can be allowed if surplus stock is available.”

Currently, India has imposed restrictions on sugar exports to ensure adequate supply for domestic needs and ethanol production. The government plans to review the sugar production scenario after July, once the monsoon season progresses and final data on sugarcane sowing is available. The spread of the monsoon will be a critical factor in determining the actual sugarcane yield and, consequently, the sugar output for the upcoming season.

India’s sugar export markets primarily include neighboring countries such as Bangladesh, Sri Lanka, and the Middle East. Any decision to permit exports will hinge on the availability of surplus stock, which is contingent on the outcomes of the monsoon and sowing activities.

This cautious approach underscores the interconnected nature of agricultural practices, climatic conditions, and economic policies in India. The sugar industry, a vital component of the country’s agrarian economy, faces the dual challenge of maintaining domestic supply while navigating the complexities of international trade. The government’s strategy will aim to balance these competing demands, ensuring that domestic consumption and ethanol production needs are met before considering export opportunities.

As the monsoon season unfolds, the government and industry stakeholders will keep a close watch on weather patterns and sowing progress. This vigilance will be crucial in making informed decisions that impact both the domestic market and India’s position in the global sugar trade.

In summary, India’s sugar export prospects for the 2024-25 season are intricately tied to the monsoon and sugarcane sowing outcomes. With an expected lower output, the government prioritizes domestic consumption and ethanol production, with exports being considered only if there is a surplus. The industry’s future steps will depend significantly on the agricultural developments in the coming months, highlighting the vital role of environmental factors in shaping economic decisions.

Jhumpa Lahiri

Jhumpa Lahiri

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