India Sugar mills to close early as rain hits cane supply

Sugar mills in India's top-producing state, Maharashtra, will stop crushing cane 45 to 60 days earlier than last year as adverse weather has reduced the availability of sugarcane, a senior official of the state government told Reuters on Friday.

The western state of Maharashtra, which accounts for more than a third of the country's sugar output, could produce 12.8 million tonnes of sugar in the 2022/23 marketing year that started on October 1, below an earlier forecast of 13.8 million tons, Maharashtra sugar commissioner Shekhar Gaikwad said.

According to the report of Reuters, lower sugar output could prevent the world's second-biggest exporter from allowing additional exports, which could support world prices and allow rivals Brazil and Thailand to boost shipments.

“Excess rainfall reduced the vegetative growth of sugarcane. This year there is low cane available for crushing. A few mills in the central part of the state could start shutting down operations in 15 days, and by the end of April all but three or four mills could have stopped grinding," he said.

Low exports

In 2021/22, Maharashtra produced a record 13.7 million tons, higher than the initial estimate of 11.2 million tons, allowing New Delhi to export a record 11.2 million tons.

But this year, sugar production in Maharashtra and neighbouring Karnataka has been revised down and will not allow India to export the extra sugar the industry is seeking, said a Mumbai-based distributor for a global trading company.

As the sugar export quota was almost exhausted, the Indian Sugar Mills Association and other trade bodies were petitioning the government to allow additional exports of up to 4 million tons.

"The industry was counting on higher production in Maharashtra to convince the government to export more. But instead of increasing, Maharashtra's production is declining," the trader said.

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

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