In their medium-term projections for world sugar markets during 2025-34, OECD-FAO in a joint report has said that sugar prices are expected to decline slightly, subject to many uncertainties, including extreme weather events, Brazil’s dominance in the global market and fluctuations in the relative profitability of sugar compared to ethanol.
About India, the report has said that sugarcane-based ethanol production will be supported by the government measures to diversify the sector. It also said that India will remain at third position as a sugar exporter after Brazil and Thailand, with a share of only 8 per cent in global trade. Ethanol production uses about 9 per cent of India’s sugar production and it is expected to increase to 22 per cent by 2034, it said.
There have been uncertainties over India’s sugar production in the last two years leading to curbs on shipments and introduction of permit system to allow the sweetener out of the country. There was projection of bumper output before the beginning of the current crushing season and after a while it emerged that the country may be on the verge of import.
It noted that projection of a good harvest in India at the beginning of crushing season contributed to decline in global sugar prices, whereas concerns over a deteriorating production outlook caused a strong price increase in February 2025. In India, the world’s second largest sugar producer, the growth rate in sugar production is expected to be slightly lower than in the past decade due to slower sugarcane production growth and greater diversion to ethanol.
