Due to the threat of worldwide food inflation, sugar prices will increase

The cost of refined sugar rose to its greatest level in more than a decade, while the price of raw sugar is almost at its highest level in more than six years, as per a report by Economic Times. The world's supply is becoming more constrained, primarily because India, one of the top exporters, reduced shipments after heavy rains damaged the cane crop and more sweetener is being shifted to biofuel.

Why sugarcane to produce biofuel?

India imported 185 million tonnes of fuel at a heavy cost of $55 billion in 2020-21 according to NIti Ayog, Therefore, it is suggested that blending ethanol with gasoline will allow for the use of sugar that is not consumed locally while achieving energy independence. By 2025, according to Niti Aayog, a 20-80 mix of ethanol and gasoline will save the nation at least $4 billion annually. India produced biofuel from 3.6 million tonnes (or about 9%) of its sugar last year; by 2022–2023, it hopes to produce 4.5–5 million tonnes.

Due to these plans, exports from India are projected to drop to as little as 4 million tonnes next season and almost halve to 6 million tonnes in the fiscal year concluding in September from about 11 million tonnes the previous year, as per a Bloomberg report.


Nations struggling with rain hit harvest

Rains have postponed harvesting, and port capacity may limit supplies to the global market even though top shipper Brazil is anticipating bumper output of sugar cane. Brazil is also harvesting a record soybean crop. Another significant producer, Thailand, expects its output to fall short of expectations this year.

In Maharashtra, which produces more than one-third of the nation's sugar, heavy rains reduced cane harvests. In contrast to earlier projections of 35.2 million tonnes and 35.9 million tonnes a year ago, the food ministry now anticipates a decrease in national production to 33.6 million tonnes in the current season.

Numerous downward revisions to supply forecasts were made as a result of low fertilizer application in Thailand, according to the Thai Sugar Millers Corp., all but five of Thailand's 57 millers have already halted crushing due to a lower-than-expected harvest. Thailand is the fourth-largest producer in the world.