Balrampur Chini forecasts prolonged El Nino conditions, emphasising long-term climate impact

Sugar prices experienced a notable uptick of 4.5 percent in the international markets, following a two-week lull after reaching an 11-year high. This resurgence can be attributed to the recent announcement by the US Climate Prediction Center, confirming the fulfillment of El Nino criteria.

The Indian Sugar Mills Association (ISMA) revised its output estimate for 2022-2023 to a lower figure of 32.8 million tonnes, accompanied by reduced export numbers. The opening stock levels align closely with the government's desired level, indicating a balanced market.

In an interview with CNBC-TV18, Vivek Saraogi, MD of Balrampur Chini Mills said that El-Nino conditions are not confined to a single year but often persist for a while.

El Nino is a weather pattern characterised by the warming of the Pacific Ocean, which can significantly influence global climate patterns. Typically lasting for several months to a couple of years, El-Nino can have far-reaching consequences on various sectors, including agriculture.

He said, "El Nino conditions do last when they come. It is not a one-year phenomenon. So that is something to be kept in mind. For the current year, I don't think the Indian Ocean Dipole (IOD) is saying a bad monsoon, that is not yet signaling a monsoon that is going to be bad. However, the current weather conditions do indicate that life is not as usual."

Talking about sugar-producing states, Saraogi said that Uttar Pradesh’s sugar production may not be severely affected by these conditions. Uttar Pradesh (UP) is one of the largest sugar-producing states in India and plays a crucial role in the country's sugar exports.

However, if El Nino's impact does manifest in the region, it could lead to a curtailment of export production. As sugar production is an integral part of UP's economy, any disruption in the industry could have ramifications for the state's ability to meet export demands. Export curtailment could potentially impact the revenue and market position of sugar producers in Uttar Pradesh, including companies like Balrampur Chini Mills.

Meanwhile, Aditya Jhunjhunwala, President of India Sugar Mills Association (ISMA) said that it's too early to take a call on the El Nino as well as the weather condition because the monsoon is yet to start, and we are keeping a close watch on the same. As of now, we do not have any negative impact on the sugar crops, and we do not foresee anything negative on sugar production as well.