India’s sugar production will plummet by nearly 8% next season, although the country will remain a net exporter, US government officials said.
The US Department of Agriculture’s Delhi bureau forecast 2016-17 sugar production at 25.5m tonnes, 2.8m tonnes down from 2015-16 levels, which are themselves down 5.0m tonnes from the previous season.
This would leave Indian sugar production at its lowest level since 2010.
The bureau cited water scarcity and abnormal weather conditions key sugar growing areas affecting production, after two back-to-back substandard monsoons, conditions which have been linked to the El Nino effect.
The fall in production would leave Indian sugar production below consumption, for the first time in eight years, the bureau said.
Still, India will remain a net exporter, the bureau said, as the country draws down its huge white sugar stocks.
The bureau saw Indian exporting around 1m tonnes of white sugar in 2016-17, down from 3m tonnes in 2016-17, and the lowest level for 7 years.
Threat to next crop
This week Robin Shaw, sugar analyst at Marex Spectron, warned that Indian sugar prospects could be even worse.
“Until a couple of weeks ago we were all concerned that the possibility of a poor or late summer monsoon, (the third poor monsoon in a row) could cause a disaster and lead to India importing,” he said.
Recent forecasts have suggested that the monsoon will be good, although with the monsoon not likely to hit India’s southern tip for at least a month, there is potential for that forecast to change.
Fears for young cane plants
But Mr Shaw warned that recent hot dry weather was keeping fears about the 2016-17 crop alive.
Cane in India is frequently replanted, rather than being ratooned, or cut back and allowed to regrow, for years on end.
Mr Shaw said that newly planted cane “is suffering from the intense heat and lack of moisture”.
“There is talk of dying cane plants,” he said.
(Source – http://www.agrimoney.com/news/indian-sugar-production-to-fall-sharply-next-season–9539.html)