Sugar prices are soaring—but Balraj Chavan, a 40-year-old farmer in Western India, isn’t celebrating. While high prices should be good news for farmers like Chavan, the forces driving prices are also hurting his harvest.
Sudden rainfall late last year in India, the world’s second-largest sugar exporter, hit crops and forced India to limit exports to about six million metric tons of sugar in the present season, down from 11 million during the previous one. Chavan lost $3,000 as a result. This year, strong sugar-cane growth could earn him $12,000 and allow him to buy a house in Pandharpur, a renowned holy town, for his wife and two children.
The arrival of El Niño, however, puts that at risk. The weather phenomenon, which typically lasts nine months to a year, can produce drought in India—and it has Indian farmers worried. Without a downpour, they won’t have enough water to irrigate the bumper sugar crops they’re hopeful for, even as it would push sugar prices, which have risen 27% in 2023, higher.