According to Paulo Roberto de Souza, the Chief Executive of Alvean Sugar SL, the world's largest sugar trader, the global sugar market would experience a grave problem if the India refrains to fill the wide global sugar supply gap from November to March or April. Hence, India may be the only country capable filling this gap amidst the prevalence of adverse drought situation in Brazil, world's largest producer of sugar and ethanol produced from sugar cane.
Majority of world’s very high polarized (VHP) sugar is produced in Brazil from high sucrose sugarcanes. But the country has been wobbling with a severe drought situation, leading to prolonged dry conditions in the central and southern Brazil. This devastating drought is predicted to cause immense crop losses, water scarcity, and intensified fire activity in the Amazon Rainforest and Pantanal Wetlands. This extreme drought in Brazil is also triggering catastrophic sandstorms, which aggravates the crop condition in the country. The Brazilian government agencies have also said that this is Brazil’s worst experienced drought ever in almost a century (91 years). This makes India a formidable candidate to fill up the huge global sugar supply, making the world's sugar market grateful for the Asian country, that was once considered as a risk to the market’s stability. India’s sugar policies were redundantly questioned for years at the World Trade Organization (WTO) by prominent competitors such as Brazil and Australia.
Sugar prices are in close proximity with their record high since the early 2017, majorly owing to its scarcity of production in leading grower Brazil following the droughts.
India is the largest consumer of sugar in the world and also the second largest producer of sugar just after Brazil. In addition, sugar industry is the largest agro-based industry in India (first being the textile industry), providing livelihood to more than 50 million sugarcane farmers across the country. Thus, the impact of Indian sugar industry in the global sugar supply is monumental.
Paulo Roberto de Souza says that sugar prices will have to surge further intrigue substantial Indian promoting to fill the market’s hole. He further adds by saying that Indian sugar export parity — the equal to conventional costs —is at the moment around 21 cents per pound, already above New York futures.