India sugar output seen lower than forecast, curbing exports

KOLHAPUR: India is likely to produce less sugar than initially estimated, as excessive rainfall across major producing states is resulting in lower cane yields, farmers and trade officials told Reuters, capping exports from the world’s second-largest producer.

Traders said India may struggle to ship even half of its allocated export quota, lending support to global sugar prices that are hovering near five-year lows while also lifting domestic prices.

India is expected to produce between 28.5 million and 29 million metric tons of sugar in the 2025/26 marketing year ending in September, according to internal estimates from five trade houses that declined to be named in line with company policies.

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The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has forecast output at 30.95 million tons for the year.

“Cane yields are down across all the main producing states. From Maharashtra and Karnataka to Uttar Pradesh and Gujarat and that’s pushing this season’s production estimates lower,” said Rahil Shaikh, managing director of Mumbai-based MEIR Commodities India.

The largest cut is expected in top producer Maharashtra, with output seen at about 9.6 million tons compared to an earlier estimate of 10.8 million tons, trade houses said.

Nearly five dozen farmers from cane-growing regions of Maharashtra and neighbouring Karnataka, including Vilas Patilfrom Kolhapur, said excessive rainfall damaged root development and led to early crop maturity.

“We were hoping for a cane yield of at least 60 tons per acre, but it came in at only 48 tons. Excessive rainfall disrupted the crop’s growth cycle,” said Patil.

Cane-growing regions of Maharashtra received as much as 115% more rainfall than normal in September, weather department data showed.

Maharashtra has produced 9 million tons of sugar so far this season, and nearly half of the 207 mills that began crushing have already shut due to cane shortages, said a senior state government official, who declined to be named as he is not authorised to speak to media.

The downward revision in sugar output, coupled with an expected rise in seasonal summer demand from next month, is likely to support prices, a Mumbai-based dealer said.

India on Friday allowed the export of an additional 500,000 tons of sugar, on top of the 1.5 million tons approved earlier, taking total export quota for the year to 2 million tons.

“Mills are fetching higher prices in the domestic market, so they have little incentive to export. Indian shipments are unlikely to exceed 700,000 tons,” said Shaikh.