Demand for Indian sugar is set for a leap in the marketing year starting October 1 due to a smaller sugarcane harvest in top exporter Brazil, global analysts and industry executives said on Tuesday.
India, the world?s second-largest sugar producer as well as supplier, is expecting a 7.4% rise in output year-on-year to 26 million tonne in 2011-12, while production in Brazil may drop by 1.1 million tonne as adverse weather conditions have hurt the cane crop there, according to government and industry officials. Brazil?s national secretary of production and agroenergy, Monoel Vicente F. Bertone, told FE that the country expects its sugar output to fall to 37.07 million tonne in the crop year through March 2012 from 38.17 million tonne a year before.
?We had droughts last year, and this year we have a lot of frost,? Bertone said. The country?s sugarcane output may decline to 588.92 million tonne in 2011-12 from 623.72 million tons last year, he added.
India needs to decide on allowing fresh sugar exports in 2011-12 urgently to enable local mills to gain from lower Brazilian production, analysts and industry executives said.
Consultancy firm Kingsman said India needs to take advantage of its higher production and lift government curbs on the domestic market.Separately, research firm Datagro said sugar production in Brazil?s key centre-south producing region may fall to 30.6 million tonne in 2011-12 from 33.5 million tonne a year before as early cane flowering and frost have forced farmers to harvest the crop early.
The centre-south region will see cane output dropping to 498 million tonne in 2011-12 from 557 million tonne last year, Datagro chief Plinio M Nastari said. Brazil?s exportable surplus of sugar in 2011-12 is expected to be less than 24 million tonne, he said.