As El Nino weather conditions threaten cane production and rising ethanol demand squeezes supply, India—once the world's second-largest producer of sugar—is predicted to have little excess for export for at least three more seasons.
Millions of tons of sugar might be kept off the global market by the combined pressures, which would constrain supplies for importers in Asia, Africa, and the Middle East and support benchmark prices in London and New York.
As weather concerns and biofuel regulations affect global sugar trade patterns, India's extended absence from export markets would eliminate a crucial balance source.Dealers at global houses have warned head offices of diminishing opportunities in India due to decreased cane availability and growing ethanol demand, according to interviews with more than a dozen trade and industry executives, government sources, and farmers.
Exports are anticipated to be curbed season by season by the government
In India, one of the world's top consumers, sugar is politically sensitive since sweets are quite popular there and many lower-class households rely on them as an inexpensive source of calories.El Nino is becoming a significant issue in India, where supplies are already scarce, according to Rahil Shaikh, managing director of MEIR Commodities India, a trader with headquarters in Mumbai.

"If rains disappoint as forecast, cane planting will suffer and this will keep India out of the sugar export market for at least ​three years, while Brazil and Thailand could also see their crops affected by El Nino."
Brazil, a major exporter, is also using more cane to make ethanol. El Nino-curtailed rains may also affect the output of Thailand, another significant exporter.
In the five seasons through 2022–2023, India exported an average of 6.8 million metric tons of sugar each year, or around 10% of all shipments worldwide. India prohibited shipments until September 30, the end of the season, after exporting about 800,000 tons this year.

According to government and business sources with knowledge of the situation, mills require government approval in order to export sugar, and New Delhi is likely to withhold export approvals each season rather than declare a multiyear embargo.
According to sources who spoke on condition of anonymity because the conversations were private, a senior minister in Prime Minister Narendra Modi's administration instructed mills to prioritize domestic availability rather than advocate for exports last month.
A request for comment regarding export potential and export limits was not answered by India's Department of Food, Civil Supplies, and Consumer Affairs.

CANE OUTLOOK FOR EL NINO CLOUDS
This year's monsoon rains in India are expected to be the weakest in eleven years due to El Nino conditions.
Farmers have postponed planting due to below-normal rains and precipitation in June that was more than 40% below average.Sambhaji Patil, who chose to plant soybeans on 2 acres (0.8 hectares) in the Sangli district of the western state of Maharashtra, stated, "I had planned to plant long-duration cane varieties in June, but since everyone is talking about lower rains, I decided to put that plan on hold."

The demand for cane seedlings has drastically decreased in recent weeks, according to nursery owner Suraj Chavan.
According to Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories, farmers are likely to move to less water-intensive crops, which could reduce cane acreage and availability in the 2027–2028 season.
In the majority of sugar-growing regions, local authorities have limited water supply for irrigation and begun marketing alternative crops like soybeans, pigeon peas, and other pulse kinds.
India was supposed to produce 30.95 million tons of sugar this season, but industry estimates now place output at 27.9 million tons, which is less than the country's yearly consumption of roughly 28.5 million tons.litres as higher ⁠ethanol blending in petrol and adoption of flex-fuel vehicles gather pace, industry estimates suggest.For the first time in a decade, sugar imports are possible.The demand for ethanol is on a very strong trend, according to Godavari Biorefineries chairman and managing director Samir Somaiya. "The next phase of demand evolution will be driven by the commercial rollout of flex-fuel vehicles."
Hero MotoCorp introduced a flex-fuel motorcycle last month, while leading Indian automaker Maruti Suzuki introduced the country's first flex-fuel passenger car.
In an effort to encourage the use of flex-fuel vehicles, India last month removed the production tax on gasoline blended with higher ethanol content and introduced fuel with up to 85% ethanol.

According to B.B. Thombare, managing director of Natural Sugar in the state of Maharashtra, future government regulations will probably favor ethanol production over sugar exports.
According to government sources and industry officials, if El Nino-related weather disruptions drastically reduce cane planting area and output, India may eventually have to import sugar. Traders have warned that supplies may become even more scarce in the 2027–2028 season.
After a drought brought on by El Nino in 2015 reduced cane planting, India last imported sugar in 2016–17 and 2017–18. India's significant purchases in 2009 and 2010 contributed to an almost threefold increase in world prices.

According to Mohan Narang, director of K.S. Commodities, a trading business in New Delhi, "a severe El Nino and rising demand for ethanol would not only wipe out exports from India, but imports into India in the coming years could also become necessary."