India's sugar demand surges in heat wave and election season

Bajaj Hindusthan Sugar

23/04/2024 08:46

By Rajendra Jadhav
       MUMBAI, April 23 (Reuters) - India's sugar consumption
this year is poised to hit a record high as demand during the
peak summer season gets a boost from heat waves and the
mobilisation of millions for elections in the scorching
temperatures.
    Higher consumption would lift local prices and boost margins
of sugar producers such as Balrampur Chini  BACH.NS , Shree
Renuka Sugars  SRES.NS , Bajaj Hindusthan  BJHN.NS , and
Dwarikesh Sugar  DWAR.NS  and help them in making cane payments
on time to farmers.
    Consumption of cold drinks and ice cream, and as a result
demand for sugar, rises in India during the summer months
roughly from mid-March to mid-June.
    But this year demand is above average as heat waves and
election rallies boost consumption of ice-cream and soft drinks,
said Avantika Saraogi, executive director at Balrampur Chini
Mills.
    Maximum temperatures in many parts of India have risen above
40 degrees Celsius, and the weather department has forecasted
that the country is likely to experience more heat-wave days
than normal between April and June.
    During the harsh summer, India is hosting the world's
largest election, in which nearly a billion people will be
eligible to vote.
    Political parties hold huge rallies, some attended by as
many as 200,000 people, undeterred by the sweltering heat, which
only intensifies as the campaign picks up pace.
    Earlier this week, following an energetic election rally at
Pune in the scorching afternoon sun, dedicated workers of a
political party flocked to a nearby restaurant to quench their
thirst with refreshing soft drinks.
    "It's sweltering out there. We need something icy to keep us
going in this heat," said Mahesh Pawar, one of the workers.
    "We're grateful to our leader for providing us with these
refreshing beverages to keep our spirits high."
    
    SWEET SUMMER    
    India's sugar consumption in during April-June could rise to
7.5 million tons, up 5% from a year ago, said a Mumbai-based
dealer with a global trade house.
    This year's unusual rise in consumption is temporary, with
demand growth returning to a normal pace next year, said Prakash
Naiknavare, managing director of the National Federation of
Cooperative Sugar Factories Ltd.
    "But right now the industry is experiencing an unusual boost
in demand. This is expected to lift total consumption this year
to a record 29 million metric tons," Naiknavare said.
    India's sugar consumption in the 2022/23 marketing year,
which ended on Sept. 30, stood at 27.85 million tons.
    Higher demand has already begun lifting sugar prices, which
have risen nearly 3% in a fortnight.
    The government has allocated a higher quota for April
compared to last year, but prices are still rising due to robust
demand from bulk consumers, said Ashok Jain, president of the
Bombay Sugar Merchants Association.

 (Reporting by Rajendra Jadhav; editing by David Evans)
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