India's sugar demand surges in heat wave and election season

India's sugar consumption this year is poised to hit a record high as demand during the peak summer season gets a boost from heat waves and the mobilisation of millions for elections in the scorching temperatures.

Higher consumption would lift local prices and boost margins of sugar producers such as Balrampur Chini , Shree Renuka Sugars , Bajaj Hindusthan, and Dwarikesh Sugar and help them in making cane payments on time to farmers.

Consumption of cold drinks and ice cream, and as a result demand for sugar, rises in India during the summer months roughly from mid-March to mid-June.

But this year demand is above average as heat waves and election rallies boost consumption of ice-cream and soft drinks, said Avantika Saraogi, executive director at Balrampur Chini Mills.

Maximum temperatures in many parts of India have risen above 40 degrees Celsius, and the weather department has forecasted that the country is likely to experience more heat-wave days than normal between April and June.

During the harsh summer, India is hosting the world's largest election, in which nearly a billion people will be eligible to vote.

Political parties hold huge rallies, some attended by as many as 200,000 people, undeterred by the sweltering heat, which only intensifies as the campaign picks up pace.

Earlier this week, following an energetic election rally at Pune in the scorching afternoon sun, dedicated workers of a political party flocked to a nearby restaurant to quench their thirst with refreshing soft drinks.

"It's sweltering out there. We need something icy to keep us going in this heat," said Mahesh Pawar, one of the workers.

"We're grateful to our leader for providing us with these refreshing beverages to keep our spirits high."

India's sugar consumption in during April-June could rise to 7.5 million tons, up 5 percent from a year ago, said a Mumbai-based dealer with a global trade house.

This year's unusual rise in consumption is temporary, with demand growth returning to a normal pace next year, said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd.

"But right now the industry is experiencing an unusual boost in demand. This is expected to lift total consumption this year to a record 29 million metric tons," Naiknavare said.

India's sugar consumption in the 2022/23 marketing year, which ended on Sept. 30, stood at 27.85 million tons.

Higher demand has already begun lifting sugar prices, which have risen nearly 3 percent in a fortnight.

The government has allocated a higher quota for April compared to last year, but prices are still rising due to robust demand from bulk consumers, said Ashok Jain, president of the Bombay Sugar Merchants Association.