Sugar industry body ISMA revised its estimates for gross production of the sweetener by 9.5 lakh tonnes to 340 lakh tonnes in the marketing year ending September. In a statement, ISMA said the gross sugar production is now estimated at 340 lakh tonnes in 2023-24, as against the gross output of 366.2 lakh tonnes in the previous year. The net sugar production stood at 328.2 lakh tonnes during 2022-23 marketing year with a diversion of 38 lakh tonnes of sweetener for ethanol-making from sugarcane juice and B-heavy molasses.

For the current 2023-24, the government has so far allowed sugar diversion of only 17 lakh tonnes for production of ethanol via sugarcane juice/B-heavy molasses. This would mean net sugar production could be around 323 lakh tonnes. ISMA said the net sugar production (after diversion for ethanol) stood at 255.5 lakh tonnes up to February 29 of 2023-24 marketing year. As many as 466 sugar mills are still operating in the country by February end.  

Meanwhile, the local Sugar prices saw a mixed movement, gaining on annual basis while showing a sustained fall on monthly basis. Wholesale price index for manufacture of sugar and molasses stood at 136.90 in February 2024, up 7.71% on year while recording a dip of 0.58% compared to January 2024. The index itself is at five month low and has dipped on monthly basis for three months in row.

The FAO Sugar Price Index averaged 133.1 points in March, down 7.6 points (5.4 percent) from February after two consecutive monthly increases, but still up 6.1 points (4.8 percent) from its value a year ago. The March decline in international sugar price quotations was mainly driven by the upward revision to the 2023/24 sugar production forecast in India and the improved pace of sugar harvest in Thailand at the final stage of the season. Large exports from Brazil also weighed on world sugar prices. However, persisting concerns over the crop in Brazil, negatively affected by prolonged dry weather conditions, continued to exacerbate seasonal trends and limited the price decline. Likewise, higher international crude oil prices also contributed to containing the decrease in world sugar prices.

UNICA, the apex sugarcane industry association of Brazil, said that the processing of sugarcane surged in the first half of March compared to last year, accompanied by significant gains in ethanol production and sales. During this period, mills in Brazil’s south-central region processed 2.22 million metric tons of sugarcane, marking a substantial increase from the 605,290 metric tons processed in the same timeframe last year. The total processing volume for the ongoing 2023-24 harvest season, which commenced on April 1, 2023, stood at 649.39 million metric tons, reflecting a gain of 19.4% compared to the previous harvest season.

Outlook:

According to a latest update from the Australian government, world sugar consumption is forecast to grow at an average of around 1% per year in 2023–24 and 2024–25, continuing this trend throughout the medium-term outlook period. Strong population growth in emerging and developing countries, particularly in India and Pakistan, is projected to drive global sugar demand. However, this growth is expected to be partially offset by a slight decline in per capita consumption in high-income countries, reflecting rising health concerns among consumers. 

The Asia-Pacific Economic Cooperation (APCC) Climate Center has released its first monsoon forecast for India this year. The Center has given two distinct forecasts for the periods of April to June and July to September. As per the predictions, India is expected to receive above-average rainfall during its main monsoon season from July to September. The change in forecast is linked to the recent ENSO alert that anticipates a smooth shift from El Nino to La Nina condition.

The APCC introduced an ENSO (El Nino-Southern Oscillation) alert system update on March 15, 2024. The ENSO status predicts a La Nina WATCH for the period of April to September 2024. 

The alert underlines the crucial need for stakeholders and policymakers to closely observe climate patterns in the approaching months due to potential impacts associated with La Nina conditions, such as altered weather patterns and consequent environmental consequences.

The APCC Climate Center, in its July to September outlook, stated: "Enhanced probability for above-normal precipitation is predicted for the region spanning eastern Africa to the Arabian Sea, India, the Bay of Bengal, and Indonesia, the Caribbean Sea, the tropical North Atlantic, southern Australia, and the southern South Pacific. A tendency for above-normal precipitation is expected for some regions of East Asia and northern Australia."