Sugar prices may increase in India, impact will be due to reduction in production
India is included in the list of the world’s largest sugar producing country. Currently India is facing a possible decline of 8% in sugar production in the country. This decline in production may cause problems for both consumers and the sugar industry. Due to this, there are chances of sugar prices increasing across the country. If the price of sugar increases then the household budget of the common people may get spoiled.
Sugar industry in India generally plays an important role in agriculture and economic structure. Millions of farmers depend on sugarcane cultivation for livelihood. Any change in sugarcane cultivation or sugar production affects the entire supply chain. Weather conditions, pest infestation and agricultural methods also contribute significantly to the sustainability of sugar production.
Situation serious in developing countries
These days the prices of sugar are skyrocketing. Due to this, the situation remains serious due to increase in the price of sugar in developing countries. Sugar prices have increased by 55 percent in the international market in the last two months. This is the first time since 2011 when the price of sugar is at its highest level. The supply of sugar has now reduced. At the same time, for the countries already struggling with rice shortage, now the shortage of sugar is equivalent to a double whammy. Food inflation has increased due to food shortage.
Food insecurity has increased mainly due to the climate phenomenon El Nino, the war in Ukraine and weak currencies. Rich countries in the Western world can afford the high costs, but people in poor countries struggle to make a living. The Food and Agriculture Organization of the United Nations (FAO) estimates that global sugar production may be down by two percent in the 2023-24 season. FAO’s global commodity market researcher Fabio Palmieri said that if this happens, global sugar production will fall by about 3.5 million tonnes. Sugar is also being used extensively for biofuels such as ethanol, so global sugar reserves are at their lowest since 2009.
Brazil is the largest exporter of sugar, but its production will help cover the shortfall only as late as 2024. Indian Sugar Mills Association (ISMA) believes that India’s sugar production may decline by eight percent this year. India is also the largest consumer of sugar and now a ban is being imposed on sugar exports there. Naradhip Anantsuk, leader of the Thailand Sugar Planters Association, said the El Nino effect in his country has not only reduced the amount of sugarcane harvested, but also changed the quality of the crop. According to a report by the US Department of Agriculture, production in Thailand may decline by 15 percent in October. Sugarcane production in Brazil is projected to be 20 percent higher than last year, but global sugar supplies won’t be relieved until March, said Kelly Gaugri, senior research analyst at agricultural data and analytics firm Grow Intelligence.
