Indian sugar industry growth

Rabobank has launched a report on the Indian sugar industry and its continued production growth – Bitter or Sweet: India Sugar Outlook for 2014-2015 and beyond.

India is the second largest sugar producer in the world, and has the largest domestic consumption. It’s industry has had three consecutive surplus sugar years, and 2013-2014 is expected to generate another surplus.

While this will likely be lower than last year’s, Rabobank predicts the long-term fundamentals for Indian sugar remain attractive:
a new government at the centre and potentially also at key sugar producing states—may usher in new hope for a more liberated sugar regime and a move to link cane pricing to sugar market price.

the removal of supply side constraints, such as cane area reservation, and further streamlining of ethanol off-take by oil-marketing companies: policies that could see major structural changes in the sector.

the quality of monsoon season will be a significant swing factor influencing the sugar supply/demand balance in 2014-2015. Current estimates expect supply to be either similar or marginally lower compared to that in 2013-2014.