Sugar output in India will likely reach a record this year as timely showers helped boost yields in the world’s top consumer. Production may total 31.5 million metric tons in the year that began on 1 October , said Abinash Verma, director general of the Indian Sugar Mills Association. That compares with its March estimate of 29.5 million tons and the previous record of 28.36 million tons in 2006-07, according to the association’s data.
A bigger harvest in the world’s second-biggest producer may further pressure prices that are trading at the lowest since September 2015. Global sugar prices that have tumbled more than 30% in the past year could fall further. The South Asian nation needs to export more to cut inventory and boost local prices, Verma said in a telephone interview.
Production is set to exceed the country’s annual demand by 6.5 million tons, compared with the March estimate of 4.5 million tons, Verma said. “The main way to reduce inventory is to export some of the output. Rain at the right time and right quantity helped increase the yields.” Raw sugar for July delivery fell as much as 4% to 10.93 cents per pound on the ICE Futures US in New York, the lowest intraday level for the most-active contract since September 2015.