Global food protectionism is likely to see a new chapter being written this year as India, which in recent years had emerged as a significant sugar exporter, braces for a drop in production. Already, the government has capped exports for the ongoing production cycle at 6.1 million tonnes, and global sugar prices have seen a surge in recent days. In 2021-22, the country had emerged as the world’s largest sugar producer and exported 11.2 million tonnes to become the second largest exporter.
But this seems unlikely in the current year as, after adjusting for cane supplied for ethanol production and ensuring it has adequate buffer stocks, the country will have a little over 5 million tonnes in surplus. And in an election year, the last thing the Ministry of Agriculture would want is to see sugar prices surge because of a mismatch between demand and supply. India, which consumes about 27 million tonnes annually, has seen sugar prices go up by close to 10 per cent on supermarket shelves since the beginning of the year. Both China and Thailand have projected lower production levels this year, and this will further strain supplies to Asian markets.
All eyes are on Brazilian production, and should this be impacted, prices will surge and supplies will shrink. The common thread binding reduced production levels this year are weather conditions, with Maharashtra, a major sugar producing state, expecting lower rainfall and Thailand blaming El Nino like conditions for its reduced production. Sugarcane is an important crop worldwide and meets food as well as bioenergy needs.
An authoritative research paper published some years ago in the International Journal of Agronomy by two Chinese scientists had highlighted the impacts of climate change on production by noting, “Sugarcane production may have been negatively affected and will continue to be considerably affected by increases in the frequency and intensity of extreme environmental conditions due to climate change.”
The scientists had concluded that the “degree of climate change impact on sugarcane is associated with geographic location and adaptive capacity.” These findings have been endorsed by several scientists, including in India. Two researchers from Amaravati University in Maharashtra had warned more than a decade ago that the “change in global climate is a matter of serious concern to sugarcane cultivators for sustainable development of the crop.” The warnings have proved prophetic, with environmental factors projected to hit production levels this year. The consumer, though, will watch the rise in prices with concern.
Both Uttar Pradesh and Maharashtra, the two major sugarcane producers in the country, have reported steep rises in ex-mill prices of sugar in recent weeks. If that trend continues, it will add to overall food inflation in the country, which while moderate in comparison to neighbouring countries, is still high enough to pinch the consumer