Not so sweet: India may need to import sugar as planting wanes
sugar output this crop year, hit by weak rains, is set to lag consumption for the first time in seven years, according to traders and a survey of farmers, and lower plantings may even force the world's No.2 producer to import in the following year.
Driven by falling yields in two key producing states, Maharashtra and Karnataka, the sluggish outlook for the crop year that began in October reinforces expectations India will ban sugar exports in 2024.
Sugar output could be even lower in the next crop year, which runs to September 2025.
Low reservoir levels in Maharashtra and Karnataka, which together produce nearly half of India's sugar, are prompting many farmers to plant crops that need less water and mature faster than cane, such as sorghum and chickpeas, Reuters found in a survey of over 200 farmers.
Reuters' calculations based on the survey showed output could fall this crop year and next, in line with traders' internal forecasts. Consumption is expected to rise over the same period.
While the survey covers a small sample of farmers in key areas, it shows growing pressures that could force India, which supplies 12% of globally traded sugar, to become a net importer from as early as the first half of 2025, industry insiders told Reuters, in what would be a major reversal.
The prospect of this year's crop falling short of forecasts and India being forced to import sugar for the first time since 2017 threatens to drive up global prices, which already hit multi-year highs last month.
Top exporter Brazil is likely to be the winner.
India's Department of Food and Public Distribution did not respond to a request for comment on the forecasts.
India produced 33.1 million metric tons of sugar in the crop year that ended
