India’s 2008 cane crop to fall, sugar prices may rise

by Dave

Sugar output in India, the world’s biggest producer after Brazil, was an all-time high at 28.4 million tonnes last year, adding to bulging global stocks, which helped prices plunge.

Trade officials forecast this year’s sugar output at 26-27 million tonnes, which will fall to as low as 21-22 million tonnes next year as farmers will be encouraged to switch to grains and oilseeds.

“Farmers look at the price situation and the market situation,” Agriculture Secretary P.K. Mishra told reporters. “Therefore, the cane area is likely to be less this year.”

Official data shows sugarcane planting from June 1 to July 4 fell to 4.28 million hectares from 5.17 million a year ago.

The news of less cane planting in India comes along with news that sugar production in Australia and Brazil may drop and Brazil will divert more cane for ethanol as crude oil prices soar,” said Atul Pandey, senior manager of Bunge India Pvt Ltd.