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India may become a net importer of sugar due to a reduction in production caused by a lack of rainfall.
agricultural products
Sugar

India may become a net importer of sugar due to a reduction in production caused by a lack of rainfall.

Production of sugar in India may decrease due to lack of rainfall, which could lead to sugar imports in 2024. The low productivity in Maharashtra and Karnataka raises concerns about export bans and the potential for India to become a net sugar importer. The production decrease could amount to 26.9 million tons, while domestic consumption is on the rise.

30 January 2025 30 January 2025

This year, sugar production in India, the world's second largest producer, may decrease due to lack of rainfall. It will be the first time in seven years that production will not be able to meet the country's needs. According to a survey of farmers and traders' opinions, this reduction in crops may even lead to the need to import sugar next year, as reported by Reuters.

A decline in crop yields in Maharashtra and Karnataka, two key states, raises concerns about a possible ban on sugar exports from India in 2024. As a result, sugar production next year may decrease even further.

A low level of water in reservoirs in Maharashtra and Karnataka is forcing farmers to switch to more water-efficient crops. According to a survey conducted by Reuters agency among more than 200 farmers, a decrease in sugar production is expected both this year and next.

Experts suggest that India, which accounts for 12% of world sugar trade, may become a net importer as early as the first half of 2025. This will lead to significant changes in the global sugar market.

Last year, India produced 33.1 million tons of sugar. According to the forecast of the Indian Sugar Mills Association, this year the number may decrease to 31.7 million tons. Trading companies predict even lower figures - from 29 to 30 million tons, taking into account restrictions on ethanol production from sugar.

Traders believe that sugar production will decrease even further next year, although exact forecasts will depend on the success of plantings and summer rainfall. It is expected that the crop will range from 25 to 26.9 million tons.

At the same time, sugar consumption in the country this year is expected to increase by 5% compared to the previous year to 29.2 million tons.

Rahil Sheikh, Managing Director of MEIR Commodities India, noted that the reduction of agricultural areas for sugar beet cultivation in Maharashtra and Karnataka could lead to the need to acquire foreign products in the global market, but exact forecasts will depend on the success of plantings.

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