economy
Sugar prices: India's sugar squeeze threatens its biggest season for sweets
India, the world's largest consumer of sugar, is trying to avoid a bittersweet festive season.
TL;DR
- Sugar prices in India have surged nearly 40% in two months, leading to government imports of 1 million tonnes.
- Production is estimated to be 11% below the government's initial forecast, attributed to reduced sugarcane output from El Niño, hoarding, and global supply issues.
- Experts point to overestimation of domestic production and allowing exports before the shortfall was apparent as key factors.
- Festival demand and stocking by food companies are increasing pressure on prices.
- Measures taken include allowing duty-free domestic sales from SEZ refineries, encouraging earlier cane crushing, and capping trader stocks.
- Global sugar supplies are also tightening due to adverse weather in major producing countries like Thailand, Brazil, and Europe.
- The diversion of sugarcane to ethanol production is also cited as a contributing factor, though the government disputes its extent.