As a result of excessive rain, sugar production in India will likely drop 6.4% to 23.5 million tons for the year beginning October 1st according to estimates compiled by Bloomberg. This output would be less than the 25 million tons forecasted by the Indian Sugar Mills Association and the lowest since 2009/2010. The reduction in Indian supplies combined with drought conditions in Brazil, (both countries the top two sugar producers in the world) will cut India’s domestic reserve and will help reduce a global sugar glut possibly increasing prices. Going into 2014/15 it is expected to be the fifth year of sugar surpluses with world output exceeding consumption by 2.1 million tons. Approximately 65.4% of the can produced in India this year will likely be crushed to make sugar with the remainder to be used for livestock feed, seeding, and the production of jaggery, a local sweetener. As of the end of January, crushers owed Indian cane farmers 120 billion rupees (US$1.93 billion) pointing to increased diversion of future cane crops to the production of jaggery.
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