India was likely to produce 26.5 million tonnes of sugar by the mid of 2020. India was considered as the biggest producer of sugar. This amount produced this year is half a million more than that of the sugar produced in 2019. India is also considered as the world’s largest consumer of sugar according to the current 2019-20 season and was also expected to leave a surplus of 6 million tonnes for the next year as per the reports of the Indian Sugar Mills Association(ISMA).
These sugar mills were expected to produce approximately 26.5 million tonnes of sugar by the mid of 2019-20, which was 1.92% lower than that of the forecast in November. According to ISMA, this was due to the fact there was a higher yield in crops and hence more robust sugar manufacture. After years of the bumper cane harvests which were a result of the high yielding crop plant introduced a few years ago.
This process of plentiful production has severely hammered domestic prices of sugar which have in turn hit mills and financial health of the sugar producers who find it difficult to repay the money they owe the cane farmers. Due to the deteriorating condition of these mills and farmers, the government was obliged to approve a subsidy of Rs.10,448 a tonne for the exports of 6 million tonnes. New Delhi’s decision to provide subsidies for export had pinched Brazil who is close to India as the biggest sugar-producing country.