India may play a pivotal role in next season’s sugar market. Among trading houses India has been given the nickname the ‘king of swing’ because of its volatile sugar production history and its effect it can have upon the market. This year’s monsoon has had a weak start and has been particularly poor in India’s central region. Rains in Maharashtra, India’s top sugar producing state, have been 70% below average and in the country’s third-ranked producing state of Karnataka, the rains are 65% below average. The lack of rain combined with cloudy weather has increased the chances of crop flowering which tends to reduce productivity. If weather patterns continue, the current sugar production estimate for India of 25 million tons may be downgraded. Concerns over India’s output comes as the industry is focused on the cane harvest in Brazil where the important Center South region is suffering from a persistent drought, however there are global factors that may balance the market. Green Pool, the Australian sugar analysis group states that ‘good reservoir levels’ from last year’s monsoon may create a buffer for India from the effects of this year’s poor one, and ED&F Man has upgraded its global sugar surplus estimate to 2.8 million tons on good progress being made by the EU, Thai, and U.S. crops.
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