Sugar output in India, which vies with Brazil as the world’s top producer, will likely drop to a three-year low next season as dry weather in some main growing areas of the western region cuts planting.
Production may decline to less than 30 million tons in the year that begins on Oct. 1 from an estimated 31.5 million tons this season, said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd. India produced record 32.5 million tons in 2017-18, according to the Indian Sugar Mills Association.
A drop in harvest for a second year will potentially cut overseas shipments and support global prices that fell 21 percent in 2018 -- a second straight year of losses -- as booming global output raised concerns about a supply glut. India switches between being a sugar importer and exporter, depending on local output.
“A drought in some parts of Maharashtra discouraged planting,” Naiknavare said in an interview by phone on Monday. “Looking at the pace of planting, it seems that the area under sugar cane will go down.” Some areas in the southern Indian state of Karnataka, the country’s third-biggest grower, also suffer from drought, he said.
India’s sugar exports may total 2.5 million to 3 million tons in the year ending Sept. 30 compared with a government target of 5 million tons, Naiknavare said. “The export window will close before Brazil’s new crop reaches the market” in March-April, he said. An increase in the minimum sale price of sugar will also slow down exports, Naiknavare said.