India sugar output may slide to three-year low after flooding

New Delhi: Sugar output in India, one of the world’s biggest producers, may hit a three-year low this season after flooding damaged crops in areas that had earlier escaped droughts.

Production in the country, which vies with Brazil as the No. 1 grower, may slide to 26.85 million metric tonnes in the year that began on October 1, down from an earlier estimate of 28.2 million tonnes, the Indian Sugar Mills Association said in a statement on Tuesday. The country produced a record 33.2 million tonnes in 2018-19, it said.

The slide in production could reduce the nation’s sugar stockpiles, which surged to a near record last year, as well as help curb exports and support global prices. Sugar futures have fallen almost 5 per cent in the past year as India boosts exports despite criticism from other producers that the outflow is depressing prices.

Sugar farmers in India had been hit by adverse weather this year. First, the annual monsoon, which waters more than half the nation’s farmland, arrived later than normal. As rainfall increased, flooding then hurt crops in some areas of Maharashtra and Karnataka, the country’s second and third-biggest producing regions. Meanwhile, precipitation in Uttar Pradesh, the biggest grower, was 9 per cent below normal.

A separate industry body also estimated that Indian output will drop. Sugar production could slide to between 26 million tonnes to 26.5 million tonnes in 2019-20, compared with 33.1 million tonnes a year earlier, the National Federation of Cooperative Sugar Factories Ltd. said on Monday.

Sugar stockpiles in India are seen rising to a record 14.58 million tonnes in the year ending September 30, the Indian Sugar Mills Association said.