(Bloomberg) -- Sugar output in India, one of the world’s biggest producers, is heading for the lowest in three years after flooding damaged crops in areas that had earlier escaped droughts.
Total production will probably slide to 26.85 million metric tons in the year that began on Oct. 1, down from an earlier estimate of 28.2 million tons, the Indian Sugar Mills Association said in a statement on Tuesday. The country produced a record 33.2 million tons in 2018-19, it said.
Benchmark sugar futures in New York advanced to the highest level in a month on Tuesday on concerns over the Indian crop. The drop in output could reduce the nation’s stockpiles, which surged to a near record last year, curb exports and support prices. Indian shipments had been rising despite criticism from other producers that the outflow was depressing the market.
Sugar production may total about 26 million tons in 2019-20 if some cane juice and B-heavy molasses are diverted to ethanol, according to the statement.
Cane farmers in India have been rocked by the weather this year. First, the annual monsoon arrived late, and as rainfall increased, flooding hurt crops in areas of Maharashtra and Karnataka, the second and third-biggest growing regions. At the same time, rain in Uttar Pradesh, the top producer, was almost 10% below normal.
Another industry body also sees lower output. Production could slide to 26 million tons to 26.5 million tons from 33.1 million tons a year earlier, the National Federation of Cooperative Sugar Factories Ltd. said Monday.
(Adds detail on sugar production in fourth paragraph.)
