Indian sugar traders, millers, and analysts are eyeing export restrictions after lower monsoon rains. According to a report by news agency Bloomberg, Food Secretary Sanjeev Chopra, however, is confident about the crop. The global sugar market has been jittery for weeks on concerns that poor rains will crimp output and prompt India to restrict shipments to contain local prices ahead of an election next year, Bloomberg said.
Monsoon in India runs from June through to the end of September, and major sugar growing regions in Maharashtra and Karnataka have seen lower rainfall this season. India is the world's second-biggest producer of the sweetener after Brazil, and the Centre has already restricted exports of rice and wheat.
Overall, India’s cumulative monsoon rainfall was 6 per cent below normal as of September 28, according to the nation’s weather bureau, but the shortfall has been even bigger in some regions. Parts of Maharashtra have seen about 14 per cent less rain, while in some areas of Karnataka, it’s been 27 per cent lower.
Late rains last year reduced yields and cut output, prompting India to restrict millers to about 6 million tons of exports in 2022-23, almost half of what was allowed the previous year. In a Bloomberg Television interview last week, the executive chairman of Shree Renuka Sugars Ltd. said output could be “much lower” and that may lead to restrictions on shipments.
According to a Bloomberg survey of 13 analysts, traders and millers, most said India may not export any sugar in the new season starting Oct. 1 due to lower output. Two respondents said shipments could total at least 2 million tons. At a conference held in New Delhi last week, Sucden’s General Director Jeremy Austin said India is expected to produce 28.6 million tons of sugar this season. The Indian Sugar Mills Association estimates the country’s output was 32.8 million tons in 2022-23.
Domestic sugar prices have gained about 5 per cent so far this year, according to data compiled by the food ministry. The government indirectly controls costs as it regulates the volume millers can sell each month.
The harvest is due to start next month and the food secretary said the output outlook has improved after recent rains. He added that the nation isn’t facing a sugar shortage and that India would ask millers to sell more to control domestic prices. The country will also watch for hoarding.