The monsoon season is coming. Earlier, the increase in sugar prices in the country has created concern. The government says that there has been no increase in sugar prices due to ethanol. However, there is a shortage of sugar. Due to this, the country which once exported sugar to the world is now going to import it. Not only India, but the whole world is facing a sugar crisis. Concerns are growing in the global market due to the increase in sugar prices. Weather problems in the world’s major sugar producing countries, India and Brazil, have put pressure on production and supply. It is estimated that the production of the current sugar season in India will be about 30.6 million metric tons less than the previous estimate. According to the government, the current increase in sugar prices is due to many reasons. Such as lower than expected domestic production, increased demand before the monsoon season, damage to the sugarcane crop due to weather-related factors, and global sugar supply shortage are responsible for this.
Sugar prices are increasing all over the world
The increase in sugar prices is not only in India. The sugar crisis is now being seen all over the world. Brazil, the world’s largest sugarcane producer, is also facing a deep sugar crisis. According to data from the US Department of Agriculture, Brazil produces 24% of the world’s sugarcane, followed by India with 16%.
Ethanol production is expanding in Brazil
Brazilian farmers, which export sugar to the rest of the world, are turning to ethanol. Brazil is using its sugarcane to produce ethanol, which has led to a sugar crisis in Brazil. According to Brazil’s national supply company, Conab, sugar production could fall by about 3%, which means that Brazil’s sugar production is expected to fall by about 43 million tons this year.
Why is Brazil moving towards ethanol?
India, the European Union (EU) and Thailand are said to be the most sensitive regions to adverse weather. Meanwhile, high crude oil prices are encouraging major sugar-producing countries like Brazil to shift ethanol production away from sugar production. Brazil raised its mandatory ethanol blending rate to 32% in late July, up from 30% a month earlier and 27% a year earlier. This could further reduce sugar availability, putting further pressure on global sugar demand.
Bad weather adds to concerns
According to a report by Valor International, the active El Niño this year is having a negative impact on sugar-producing regions. Climate change is affecting sugarcane-producing regions like India and Thailand. Thailand, which produces 6% of the world’s total sugar, will feel the negative impact of the weather from next week. El Niño is expected to reduce rainfall. According to the US Commodity Exchange, US sugar futures are trading at 17 cents a pound, near their highest level since May 2025. The market is being supported by the possibility of further tightening of global sugar supplies. In addition, the strongest El Nino in a decade has increased production risks. Analysts have expressed concerns about a global sugar shortage in 2026/27.
