Indian Shortfall Drags Down World Sugar 11%

A bigger-than-expected drop in the Indian sugar harvest this year could widen a production shortfall that will erode inventories, reports Bloomberg. Processing mills are forecast to produce the equivalent of 148.7 million metric tons of raw sugar in the year ending in September, according to the US Department of Agriculture (USDA). Output will be down 11% from 166.5 million tons the previous year, says USDA.

India -- the world's second-largest supplier after Brazil -- will produce 16.78 million tons, down from a November forecast of 22.87 million tons and the 2008 total of 28.63 million, USDA says, resulting from sugar-cane growers planting more profitable crops as a global surplus lowered prices and lower-than-normal rainfall reduced yields.

Brazilian supplies reached 32.35 million tons in the year that ended last month, similar to the 32.1 million produced a year earlier, reports USDA. Global consumption will total 157.53 million tons this year, down from a November estimate of 162.1 million and up from the total used in 2008, USDA says. In the 2009/10 marketing year, the agency predicts, consumption will rise to 159.04 million tons.

Next year, says USDA, India’s production could reach 20.75 million tons, while Brazil will produce 36.85 million tons in the year through April 2010. Global output in the 2009-2010 marketing year will rise 7.5% to 159.9 million tons, USDA says.