The recent decrease in sugarcane yield in India due to severe weather conditions such as drought, excessive rainfall, and floods, as well as the outbreak of the red rot disease, is expected to complicate the domestic supply of sugar for the 2024-25 marketing season.

The yield rate of sugarcane has dropped significantly, from the usual 120-130 tonnes per hectare to around 80 tonnes per hectare, leading to concerns over a reduction in overall sugar production.

This reduction is likely to fall below the country’s domestic consumption, complicating the government’s decision on whether to allow commercial sugar exports.

Although India had a surplus of 20-25 lakh tonnes of sugar from previous production, it remains uncertain how much of this will be available depending on the final figures of domestic sugar production.

The global sugar market will likely see high prices, largely influenced by the sugar production levels in Brazil, Thailand, and the European Union.

However, India may face challenges in managing its own supply and could find itself limiting sugar exports to meet internal demand.

Further complicating matters is the rise in the production cost of sugar in India, which has not been adequately reflected in the ex-factory Minimum Selling Price (MSP) for sugar.

This disparity has created additional financial strain on millers, who are already grappling with reduced yields and higher costs of production.

The situation points to a challenging period ahead for both the government and sugar producers in India.