According to ISO, the world is looking at a sugar deficit of 2 million tons

World sugar production is likely to decline by 1.21 percent in 2023-2024 from October, while the market is forecast to be in deficit at 2.118 million tonnes (mt), according to the International Sugar Organization ISO. The organization forecast sugar production for the 2023-2024 season at 174.84 million tons compared to 177.02 million tons this season. Consumption may increase to 176.96 tonnes from 176.53 tonnes. 

 Factors to consider 

  This results in a deficit of 2.118 million tons compared to a surplus of 0.493 million tons this season. “Some factors (global scenario) need to be considered, like how the rains look in India in September and October and their impact on sugar production in the new season,” said Uppal Shah, co-founder and CEO. Director of AgriMand. Brazil is expecting a record harvest, but  high crude prices could cause ethanol production to tumble further. The coming months will be crucial, especially for India. There have been reports of a drop in sugar exports, but these are early days, he said, adding that January 2024 is the perfect time to end the season, Shah said. 

 12 years at the top 

  ISO executive director Jose Orive said raw sugar prices are expected to rise to around 25 cents per pound (€45,950/ton). Raw sugar prices hit a 12-year high of 27.44 cents (₹50,425/tonne) on the InterContinental Exchange (ICE) in New York. India’s lower yields may be one reason why ISO is reducing global sugar production. In July, the Indian Sugar Mills Association (ISMA) estimated sugar production at 31.7 mt but the Centre has said the assessment was “highly premature”.  ISMA chairman Aditya Jhunjhunwala told the media in New Delhi that his association believes in its preliminary estimate, excluding 4.5 mt diversion towards ethanol next sugar season. However, the industry will come out with a fresh estimate during November after analyzing the satellite image of sugarcane area across major producing States as there was rainfall deficiency in July-August and revival of monsoon rains in September. The sugar production for the current season is 32.8 mt, excluding diversion of 4.2 mt for ethanol. Industry sources, however, are pegging Indian sugar production for the next season at 30.4 mt with some, who have visited sugarcane regions in Maharashtra, pegging it lower than 30 mt. Compared to this season’s production of 32.9 million tons. 

 Indian scenario 

 In India,  total sugar supply is estimated at 36.1 million tonnes (39.1 million tonnes this season) against an opening stock of 5.7 million tonnes. Domestic consumption is predicted at 28.1 million tons and exports at 1 million tons, the total demand may be 29.1 million tons (33.5 million tons including 6.2 million tons). That leaves 7 million in carryover or end stocks for next season.  President Praful Vithalani of All India Sugar Trades Association (AISTA) said that in 2023-2024, sugar production in India may decline for the second  year in a row. “In 2021-22, the total availability was 45.5 million tonnes. In 2022-23, the total availability was 39.8 mt and in 2023-24 it may be 35.5-36 mt, 9 mt less in three years. He said that sugar production would decrease in seven years. The sugar production cycle is such that production falls for two consecutive years before recovering. “We have to see if it improves in 2024-25,” the AISTA president said.  The general view is that sugar production could be 30-31 million tonnes in 2023-24,  a margin of error of 10-15 per cent  on either side, Vithalani said. 

 Industry sources with personnel on the ground said the sugarcane crop suffered in some parts of Maharashtra due to insufficient rains in August. “In some places, the plant has dried up,” said the source, who did not want to be identified.

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