India likely won't export sugar for years as El Niño, ethanol squeeze supply

India, once the world’s second-largest sugar exporter, is expected to have little surplus for export for at least three more seasons as El Niño weather conditions threaten cane production and rising ethanol demand squeezes supply. The twin pressures are poised to keep millions of tonnes of sugar off the world market, tightening supplies for importers across Asia, Africa and the Middle East and supporting benchmark prices in London and New York. A prolonged absence by India from export markets would remove a key balancing supplier as weather risks and biofuel policies reshape global sugar trade flows. Interviews with over a dozen trade and industry executives, government sources and farmers show that lower cane availability and rising ethanol demand will leave little for exports for several years, prompting dealers at global houses to warn head offices of shrinking opportunities in India, trade sources said. Government expected to curb imports season by season Sugar is politically sensitive in global top consumer India, where sweets are highly popular and many poorer households rely on it as a cheap source of calories. “Supplies are already tight in India, and now El Niño is emerging as a major risk,” said Rahil Shaikh, managing director of MEIR Commodities India, a Mumbai-based trader. “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 Niño.” Top exporter Brazil is also diverting more cane for ethanol. Thailand, another major exporter, could also have its output hit by El Niño-curtailed rains. India exported 6.8 million metric tonnes of sugar annually on average in the five seasons through 2022-23 — about 10 per cent of global shipments. This year, after exporting around 800,000 tonnes, India banned shipments until September 30, the end of the season. Mills need government approval to export sugar, and New Del