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HomeIndustry & UpdatesIndia’s sugar export decision hinges on cane yield estimates: Govt

India’s sugar export decision hinges on cane yield estimates: Govt

India's 2023/24 sugar exports are contingent on cane yield estimates due to rain-related yield concerns. Prioritizing domestic sugar supply, government reacts to rising local prices with extra sales allowance

In a recent announcement, the Indian government has revealed that it will make a decision regarding sugar exports for the upcoming 2023/24 season after obtaining accurate estimates of the total sugar cane production. The Department of Food and Public Distribution emphasized that their foremost priority is to ensure an ample supply of sugar for consumption, ethanol production, and the maintenance of closing stocks amounting to 6 million tonnes for the approaching season.

This move follows a report from Reuters which suggested that India is poised to halt the export of sugar from mills in the next season starting from October. This decision, if implemented, would mark the first time in seven years that sugar shipments have been suspended, attributed to diminished cane yields caused by inadequate rainfall.

In the current season, mills were permitted to export only 6.1 million tonnes of sugar until September 30, a significant reduction compared to the record 11.1 million tonnes allowed in the previous season. In a strategic attempt to stabilize domestic sugar availability and prices, the country had previously classified sugar as a restricted commodity until October 31, 2023.

This announcement has already impacted local sugar prices, causing them to surge to their highest level in nearly two years. In response, the government has sanctioned an additional sale of 200,000 tons of sugar by mills in August, aiming to curb the rising prices.

The challenging monsoon conditions in key cane-producing regions, namely Maharashtra in the west and Karnataka in the south, have played a pivotal role in this situation. Both these states contribute to over 50% of India’s total sugar output, and this year’s monsoon rains have been deficient by up to 50% according to weather department data.

Anticipating the impact of these weather conditions, the Indian Sugar Mills Association (ISMA) had previously projected a potential 3.3% decline in sugar production for the 2023/24 season, estimating a total of 31.7 million tonnes. As the Indian government evaluates the forthcoming cane production estimates, it remains committed to making decisions that ensure a balanced and sustainable sugar market for the nation.

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