The upsurge in the Covid-19 pandemic in India, one of the primary sugar producing and consuming countries globally, may affect local demand for the sweetener. “If the lockdown persists for a long time, then it will definitely affect sugar consumption,” stated Archer Consulting in a note. Industrial demand may be affected if restrictive measures continue. Analyst Michael McDougall of Paragon Global Markets said that consumption in the Asian country should be affected. He recalls that changes in demand generally take longer to be noticed. Together with Brazil, India is the largest global producer of the sweetener. On the supply side, there are still few signs that the pandemic has had a significant effect. “In terms of logistics, sugar is among the essential commodities, so it will keep moving,” says Archer. McDougall says he also has not received reports of problems with logistics. The world may become more dependent on the Indian sugar supply this year due to dry weather in Brazil’s central and southern regions. There is a possibility of cuts in the region’s production estimate. India’s government subsidy for exports this season (which runs through September) applies to 6 million tons. According to the Indian Association of Sugar Mills (ISMA), 2.97 million tons were already shipped between October 2020 and March 2021. The limited quota of subsidies can hinder the country’s exports.

Sources: News