Investing.com -- The global sugar market is bracing for a tighter supply due to a drop in output from India, the world's second-largest sugar producer.
The country's sugar production for the current season is projected to decline to 26 million tons, a reduction of about 1 million tons from most industry estimates.
This decrease is attributed to disease affecting the cane crop in Uttar Pradesh, India's leading sugar-producing region, as reported by Ravi Gupta, an executive director with Shree Renuka Sugars (NSE:SRES) Ltd, at the Dubai Sugar Conference last week.
The shortfall in India's sugar production is expected to push up prices for prompt supplies. However, production is anticipated to recover in the next season, beginning in October, potentially tipping the global market into a surplus.
Despite this, short-term supplies may continue to remain tight due to lower output from another key producer, Thailand, this season.
This supply-demand imbalance has already triggered a rise in white sugar futures, which have increased by over 8% this month. Gupta noted a strong demand for white sugar, with lower supplies from the European Union and Thailand.
He also mentioned a possible low crop yield in Pakistan, which may require additional white sugar to meet its domestic demand.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.