India's Sugar Production Slumps: Lower Yields Spur Early Mill Closures

India's sugar production is expected to fall below consumption for the second consecutive year due to lower cane yields, forcing mills to close earlier than usual. This decrease in production coupled with increased exports is likely to bolster local prices amidst dwindling domestic stockpiles.

India is facing a notable sugar production shortfall, as it is set to fall below domestic consumption for the second year in a row. This is a result of lower cane yields forcing mills to shut down sooner than anticipated. Trade officials highlighted these concerns to Reuters on Thursday.

The reduction in output and simultaneous rise in exports are likely to deplete domestic stockpiles and elevate local sugar prices, which have been under pressure from surplus supplies. Industry insiders estimate production won't surpass 28 million metric tons this season.

Excessive rainfall has resulted in lower cane yields, leading to the early closure of 467 out of 541 sugar mills by March end. Consequently, the year started with opening stocks of 5 million tons but could reduce to less than 4 million tons next season, bolstering sugar prices.

(With inputs from agencies.)