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India likely to become net importer of sugar as drought dries fields

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India is likely to become a net importer of sugar in 2016/17 as back-to-back drought years dry irrigation channels and ravage cane fields, with output in the country’s biggest producing state seen dropping over 40 per cent.

Ashok Jain, President of the Bombay Sugar Merchants Association (BSMA), said on Wednesday in New Delhi that this would mark the first time the nation has been a net importer of the sweetener in four years.

He said the switch is likely to support global prices that have already been rising this year.

Jain said it would also give rival producers such as Pakistan, Thailand and Brazil the chance to boost shipments from their ports.

“India will need to import next year due to a production shortfall.

“Drought has severely affected cane plantations in Maharashtra.

“The government should stop exports now to reduce import requirements in the next season,” he said.

Jain said the El Nino weather phenomenon, which brought dry conditions to many regions, has stoked the worst drought in decades in some parts of India.

He said with thousands of small-scale sugar cane growers in Maharashtra state failing to cultivate crops for the next marketing year, starting October.

Thombre, President of the Western India Sugar Mills Association, said next season’s local consumption was pegged at around 26 million tonnes.

He said the Maharashtra’s production could drop below 5 million tonnes and it could pull down the total output to 22.5 million tonnes.

Thombre said the world’s biggest sugar consumer was set to churn out 25.7 million tonnes in the current season, with Maharashtra contributing 8.5 million tonnes.

“Indian mills are contracted to export nearly 1.5 million tonnes this season.

Tracey Allen, a commodity analyst at Rabobank in London, said there was a possibility of seeing sugar importation to India next year.

“Indian imports have in the past boosted global sugar prices, traders said.

“The global supply deficit is going to rise with the Indian shortfall.

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