India's Sugar Mills Shut Down Early Amidst Cane Shortage

Over three dozen sugar mills in India's major cane-growing states have halted operations earlier than usual due to adverse weather reducing cane availability. This early shutdown could result in lower than expected sugar production, leading to increased local prices and cautious export behavior among mills.

Over three dozen sugar mills in India's leading cane-producing states have stopped operations nearly two months earlier than usual. These closures, driven by adverse weather conditions affecting cane supplies, suggest a lower sugar output this year, consequently raising local sugar prices and affecting export strategies.

This year, at least 37 mills in Maharashtra, Karnataka, and Uttar Pradesh have closed, whereas only 11 had done so during the same period last year, according to a senior industry official. The drought from the previous year severely impacted cane yields, leading to supply shortages.

The Indian Sugar and Bio Energy Manufacturers Association estimates a 14.7% drop in production for the marketing year ending September, with dealers predicting even steeper declines. The situation is compelling mills to demand higher prices for exports, with local prices having already surged by 10%.