India's sugar output could fall to 32.8 million tonnes, trade body says

India is likely to produce 32.8 million tonnes of sugar in the 2022-2023 marketing year, down 3.5% from the previous forecast, as sugar cane yields in major producing states fell due to erratic weather conditions, a leading trade body said on Wednesday.

Lower sugar output could limit exports from the world's second-biggest exporter, lifting global prices, and allowing rivals Brazil and Thailand to boost their shipments.

"Rainfall was erratic. Sugar cane crop didn't get ample rainfall during the growth phase and got too much when it wasn't required," said Aditya Jhunjhunwala, president of the Indian Sugar Mills Association (ISMA).

The trade body in January was expecting India to produce 34 million tonnes in the current season ending on Sept 30, after harvesting a record 35.8 million tonnes in the previous season.

The ISMA was expecting output of 36.5 million tonnes at the start of the season in October 2022.

Reuters was the first to report in December on the likely drop in production.

Weather trimmed the production of top producer Maharashtra state to 10.5 million tonnes from 13.7 million tonnes a year ago, he said.

This reduction is not providing space for additional exports from the country, Jhunjhunwala said.

India allowed mills to export only 6.1 million tonnes of sugar in the 2022-2023 season, but Prime Minister Narendra Modi's administration was expected to allow a second tranche of shipments.

India exported a record 11.2 million tonnes of sugar in the previous 2021-2022 season.

The country mainly exports sugar to Indonesia, Bangladesh, Malaysia, Sudan, Somalia and United Arab Emirates.

Despite the drop in sugar production, there is ample supplies in the country to fulfil local consumption of 27.5 million tonnes, Jhunjhunwala said.

The country could start the 2022-2023 marketing year on Oct 1 with carry-forward stocks of 6.2 million tonnes, down from the current season's 7 million tonnes, he added.