With sharp fall in sugarcane yields owing to drought and white grub infestations in key growing areas, sugar production of India is likely to decline by 7.4% to 30 million tonnes in the 2018/19 marketing year that started on October 1, down from an earlier foretaste of 32.4 million tonnes and the previous year's production of 32.5 million tonnes.
The drop will reduce exports from India and likely help support global prices that have fallen 17% so far in 2018. Besides, almost all mills have started operations and are reporting lower cane yields. Though the marketing year starts in October, most Indian mills start operations in November.
According to state government data, Maharashtra, India's second-biggest sugar producer, received 23% less rainfall than normal this year during the June-September monsoon season. Some fields were also hit by infestations of white grubs that rapidly spread due to the lower rainfall.