India's sugar squeeze threatens its biggest season for sweets
Summary
India is facing higher sugar prices due to lower production and increased demand during its festive and wedding seasons. To manage this, the government is importing one million tonnes of sugar, the first time in nearly ten years, after initially approving exports that worsened the shortfall.Key Facts
- Sugar prices in India rose by almost 40% in two months, reaching about 58-60 rupees per kilo in August.
- India is the world's largest consumer and the second-largest producer of sugar.
- Sugar production is now expected to be 30.6 million tonnes for the current season, 11% less than earlier predicted.
- The government approved exports of 1.5 million tonnes and allowed 800,000 tonnes to ship before stopping exports in May.
- Nearly three million tonnes of sugarcane will be used to produce ethanol, reducing available sugar for consumption.
- Imports of one million tonnes are planned to help fill the supply gap caused by lower production and higher demand.
- Sugarcane crops have been affected by less rainfall and dry weather in key growing regions.
- The government is also allowing duty-free sales of imported sugar from special economic zones to help meet demand.
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