India sugar production lower than expected, reducing exports

Farmers and trade officials have said that India will likely produce less sugar than originally estimated due to a 'higher rainfall in major producing states,' which is resulting lower cane yields. This is expected to limit the exports of the world’s second largest?producer.

India's export quota may not be enough to meet the needs of its traders, who said that India would struggle to fulfill even half. This will help support global sugar prices which are at five-year lows and also boost domestic prices.

According to estimates by five companies that refused to name themselves because of company policy, India will produce between 28.5 million and 29.0 million metric tonnes of sugar during the marketing year 2025/26 ending in September.

ISMA (Indian Sugar & Bio-Energy Manufacturers Association) forecasts production at 30.95 millions tons for 'the year.

"Cane yields have decreased in all major producing states." Rahil Shaikh is the managing director of Mumbai's MEIR Commodities India.

Trade houses reported that the biggest cut was expected to be in Maharashtra. The output is estimated at 9.6 million tonnes, down from an earlier estimate of 10.8 millions tons.

Vilas patil, a Kolhapur-based farmer, was among the nearly five dozen cane farmers who said that excessive rainfall had damaged root development, resulting in early maturity of crops.

"We had hoped for a cane production of at least 60 tonnes per acre but we only got 48 tons." "Excessive rain disrupted the growth cycle of the crop," said?Patil.

Weather department data shows that rainfall in Maharashtra's cane-growing areas was 115% higher than normal for September.

Maharashtra produced 9 million tonnes of sugar this season. Nearly half of the 207 crushers that started crushing have closed already due to cane shortages.

A Mumbai-based dealer stated that the downward revision of sugar production, combined with the expected increase in summer demand from next month will likely support prices.

India allowed an additional 500,000 tons of sugar to be exported on top of the 1.5 million tons previously approved, bringing the total export quota of the year up to 2,000,000 tons.

Exportation is not a priority for mills because they are able to sell their products at a higher price on the domestic market. Shaikh said that Indian shipments will not exceed 700,000 tonnes. (Reporting and editing by Mrigank Dahniwala; Mrendra Jadhav)

(source: Reuters)