Adverse weather hits Indian cane crop and curtails sugar output (updated)

Bajaj Hindusthan Sugar

17/01/2023 09:06

(Adds detail, dealer quote)
    By Rajendra Jadhav
       MUMBAI, Jan 17 (Reuters) - India is likely to produce
34.3 million tonnes of sugar in 2022/23, down 4% from the
previous forecast, after sugar cane yields in key producing
states were hit by adverse weather, a senior industry official
told Reuters on Tuesday.
    Lower sugar output could limit exports from the world's
second-biggest exporter, lifting global prices  SBc1   LSUc1 
and allowing rivals Brazil and Thailand to increase their
shipments.
    "Excessive rainfall and cloudy weather in September and
October curtailed sugar cane's vegetative growth. Cane yields
are lower than the last year," Prakash Naiknavare, managing
director of the National Federation of Cooperative Sugar
Factories Ltd, told Reuters.
    India, the world's biggest sugar producer, had produced a
record 35.9 million tonnes of sugar in the previous season,
which ended on Sept. 30.
    Maharashtra, which accounts for more than a third of the
country's sugar output, is expected to produce 12.5 million
tonnes of sugar in the marketing year that began on Oct. 1, down
from an earlier forecast of about 13.8 million tonnes,
Naiknavare said.
    "There might be further reduction in the production
estimate, but there is no possibility of upward revision,"
Naiknavare said.
    The revised estimate of 34.3 million tonnes is "very
optimistic" and production could drop below 33 million tonnes,
said one Mumbai-based dealer at a global trading house.
    Reuters was first to report in December about the likely
drop in production.
    New Delhi has allowed mills to export 6.15 million tonnes of
sugar in the first tranche of this year's exports. The Indian
Sugar Mills Association expects India to earmark up to 4 million
tonnes of sugar for overseas shipment in the second tranche.
    The government is unlikely to allow additional exports
because it will first try to fulfil local demand, the dealer
said.
 (Reporting by Rajendra Jadhav
Editing by Christopher Cushing and David Goodman
)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters
Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))