India has extended its sugar export restrictions indefinitely, previously set to conclude on October 31, confirming some concerns about the availability of Indian sugar in the global market in the first quarter of the upcoming year.
Adding to these concerns, Karnataka, the third-biggest sugar-producing state, anticipates a significant 42.3% drop in sugar production vs last year’s to 3.45 MMT, a significant decline from the 5.98 MMT achieved in the previous season (22/23). This reduction is primarily due to decreased area dedicated to sugarcane cultivation (around -13% YoY) and lower yields due to deficit rainfall and drought conditions. Uttar Pradesh and Karnakata received rain below the average in the last four weeks, while Maharashtra was higher than the historical average.
To provide a more insightful outlook in comparison to the production of other states, Minister for Sugar Shivanand Patil announced that all sugar mills in Karnataka will begin their sugarcane crushing earlier than usual, precisely on October 25, as opposed to the usual date of November 1st.
The anticipated national production of 29-30 million metric tonnes, influenced by unfavourable monsoons, sets the stage for the coming year. As states initiate their crushing operations, further data will become available. However, the current market sentiment indicates that India will likely impose export quotas till at least May 2024. In this scenario, there is a potential need for sugar imports, which could drive up the prices.
In the 2022/2023 crop season, India’s sugar export quota plummeted to 6.1 MMT, marking a substantial 44% decline compared to the previous year. Recent reports for the 2023/2024 crop season suggest that India is leaning towards refraining from exporting any sugar to the global market.
Figure 1: Total Exports from India YTD
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