India set for extended sugar export shortfall as El Nino threatens cane output | Food Business Middle East & Africa - No. 1 Food & Beverage Formulation, Processing & Packaging Publication
India’s sugar exports are projected to remain constrained for years as El Niño weakens monsoons and ethanol demand rises, tightening global supply and supporting international sugar prices.
INDIA – India once the world’s second-largest sugar exporter is expected to have little surplus for export for at least three more seasons as El Niño weather conditions threaten cane production and rising ethanol demand squeezes supply. The twin pressures are expected to keep millions of tonnes of sugar off the world market tightening supplies for importers across Asia Africa and the Middle East and supporting benchmark prices in London and New York. A prolonged absence by India from export markets would remove a key balancing supplier as weather risks and biofuel policies reshape global sugar trade flows. According to Reuters interviews with over a dozen trade and industry executives government sources and farmers show that lower cane availability and rising ethanol demand will leave little for exports for several years prompting dealers at global houses to warn head offices of shrinking opportunities in India. Sugar is politically sensitive in India where sweets are popular and many poorer households rely on it as a cheap source of calories. Rahil Shaikh managing director of MEIR Commodities India said supplies are already tight in India and El Niño is emerging as a major risk. He added that if rains disappoint cane planting will suffer and India could be out of the sugar export market for at least three years while Brazil and Thailand could also see crops affected by El Niño. Brazil is also diverting more cane for ethanol while Thailand could have output hit by El Niño-curtailed rains. India exported 6. 8 million metric tonnes of sugar annually on average in the five seasons through 2022-2023 about 10 percent of global shipments. This year after exporting around 800000 tonnes India banned shipments until September 30 the end of the season. Mills need government approval to export sugar and New Delhi is likely to withhold export permissions each season rather than announce a multiyear ban according to government and industry sources. Last month a top minister in Prime Minister Narendra Modi’s government told mills to prioritise domestic availability and not lobby for exports. El Niño conditions are forecast to weaken India’s monsoon rains to their lowest in 11 years. Below average rains and June precipitation more than 40 percent below average have prompted farmers to delay planting. Local authorities are promoting alternative crops such as soybeans pigeon peas and pulses and restricting irrigation water. India was expected to produce 30. 95 million tonnes of sugar this season but output is forecast at 27. 9 million tonnes below consumption of about 28. 5 million tonnes. Industry estimates suggest inventories at mills are expected to fall sharply at the start of the next season reflecting tight supply conditions and continued pressure from domestic consumption and ethanol demand growth. SignupHEREto receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on ourWhatsApp channelfor updates.