India's lower sugar output to hit global consumers

A sharp decline in sugar output in India, the world's second biggest sugar producer, in 2008-09 crop year is likely to result in global shortfall and then may lead to higher prices, says a report.

According to a report by the Netherlands-based Rabobank, there would be a deficit of over five million tonne of sugar this year globally, which would eventually lead to higher prices.

"Signs are emerging that the global deficit anticipated for 2008-09 international crop year is deepening, largely as a result of further downward revisions of India's production," the author of the report, Luke Chandler, said.

India reduced its sugar production estimate for 2008-09 season by over 37% to 16.5 million tonne against 26.5 million tonne in the previous season, he said. Sugar season runs from October to September.

Besides India, lower output in Pakistan, China and European Union is also expected to widen sugar crunch in the global market, he said.

An anticipated global sugar deficit is likely to have an impact on international prices, which are expected rule between 13 and 13.5 US cents per pound this year compared to 11.6 US cents per pound in 2008, the report noted.

PTI