The Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) have released a joint report predicting key trends in the global sugar market for 2025–2034. According to the report, India will see major changes in its sugar industry, with a significant shift toward ethanol production.
India’s Role in Global Sugar Trade
Currently, around 9% of India’s sugar production is used to make ethanol. The report forecasts that this number will grow to 22% by 2034. This shift is driven by government initiatives aimed at diversifying the sugar sector and boosting the country’s ethanol blending program.
India is the world’s second-largest sugar producer and is expected to remain the third-largest sugar exporter after Brazil and Thailand, holding about 8% of the global market share. However, uncertainties over sugar production in recent years have led to restrictions on sugar exports and the introduction of permit systems.
Sugar Production Trends
India’s sugar production growth rate will be slower compared to the past decade due to limited sugarcane expansion and increased ethanol diversion. Despite this, India will add 8.7 million tonnes (mt) of sugar by 2034 the highest increase in Asia. Thailand is expected to grow by 3.6 mt and China by 2 mt.
India, along with Indonesia, Pakistan, and China, will drive sugar consumption in Asia. Rising incomes and population growth in these countries (except China) will increase demand for processed foods and beverages. On the other hand, countries like China and Japan will continue to prefer low-sugar diets.
Global Sugar Market Outlook
Globally, sugar demand will be fuelled by population growth in low- and middle-income countries, particularly in Asia and Africa. In contrast, high-income countries will see stable or declining sugar consumption due to health concerns.
Brazil will maintain its dominance in sugar production with the expansion of sugarcane plantations, while India and Thailand will benefit from improved sugarcane varieties and better extraction technologies. The European Union will remain the leading sugar beet producer.
Challenges to Sugar Production
The report warns that competition for agricultural land and limited availability of plant-protection products could hinder sugar production. Disease risks and climate uncertainties may further impacts yields.
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