India's Maharashtra state to produce less sugar as mills close early

INDIA’S top sugar-producing state, Maharashtra, may churn out nearly 16 per cent less sugar than previously estimated, as mills are closing early due to limited availability of sugar cane, a senior state government official said on Monday (Mar 27).

Lower sugar output could prevent the world’s second-biggest exporter from allowing additional exports, potentially supporting global prices and allowing rivals Brazil and Thailand to increase exports.

The western state of Maharashtra, which accounts for more than a third of India’s sugar output, could produce 10.7 million tonnes to 10.8 million tonnes in the marketing year from 2022 to 2023 that began on Oct 1. This is down from an earlier forecast of 12.8 million tonnes, Maharashtra’s sugar commissioner Shekhar Gaikwad said.

“Mills are closing at a rapid pace. Almost all mills will close by this month’s end. Only a handful will be operational in the first week of April,” he said.

Sugar mills in Maharashtra were operational until mid-June in the period from 2021 to 2022, as they harvested a record crop.

Maharashtra, which often surprises the global sugar market with wide swings in production, had produced 10.4 million tonnes of sugar as at Mar 26, lower than last year’s 11.6 million tonnes during the same period.

Out of 210 sugar mills that started operations this year, 155 had stopped crushing as at Mar 26.

In the period from 2021 to 2022, Maharashtra produced a record 13.7 million tonnes, higher than an initial estimate of 11.2 million, and allowing New Delhi to export a record 11.2 million tonnes.

India allowed mills to export only 6.1 million tonnes in the current season in the first tranche. The industry was expecting the government to allow additional exports of around two million tonnes in a second tranche.

SEE ALSO

Sugar prices hovering near 6-year high amid concerns of supply dearth

India extends halt on futures trade in key farm commodities by a year

“The sharp drop in Maharashtra’s production means there won’t be additional exports,” said a government official, who declined to be named.

India mainly exports sugar to Indonesia, Bangladesh, Malaysia, Sudan, Somalia and the United Arab Emirates. REUTERS