India expects 8% Sugar output Decline

The Indian Sugar Mills Association (ISMA) reported on Tuesday that India's sugar production for the 2023/24 marketing year, commencing on Oct. 1, is expected to decrease by 8% to 33.7 million metric tons. This decline is attributed to reduced rainfall in key producing states, potentially impacting yields.

A lower sugar output could lead the world's second-largest sugar producer to refrain from allocating export quotas, potentially bolstering global prices, which are currently trading at multi-year highs.

The ISMA stated, "Sugar production for 2023/24 without considering diversion towards ethanol has been estimated at around 33.7 million tons, against 36.6 tons estimated for 2022/23."

While the trade body did not provide an estimate for net sugar production after ethanol diversion, it noted that the output would surpass the country's annual consumption of 27.85 million tons.

The exact diversion of sugar towards ethanol will be determined once the government announces the annual ethanol procurement price.

Last year, sugar mills diverted 4.1 million tons of sugar for ethanol production, and a similar allocation could potentially reduce the new season's output to 29.6 million tons, according to global trade house.