Indian sugar exports are expected to top seven million tonnes (mt) this season to September 30, while next season shipments are expected to be at least six mt with global prices ruling near 4-1/2-year high, industry officials say.
“We shipped 4.5 lakh tonnes of sugar that remained to be exported last season (October 2019-September 2020) under the Centre’s scheme to get assistance for such exports. This season, we have exported six mt under a similar assistance scheme. Besides another seven lakh tonnes will be exported under open general license (OGL) by September 30. Overall, we will export 7.15 mt this season,” said Praful Vithalani, President, All India Sugar Traders Association (AISTA).
“We have completed exports of sugar that can get government assistance. Besides, we will be exporting at least seven lakh tonnes before the season ends. We have ample stocks to export and we have begun selling for the next season too,” said Rahil Sheikh, Managing Director, MEIR Commodities India.
Forward contracts
“Sugar mills in Maharashtra and Karnataka have entered into forward contracts to sell sugar for the next season since the current global price is viable for them as ports are nearer for them. North India mills will look at exporting without any government assistance if raw sugar prices touch 21.5 US cents a pound in the global market,” said Abinash Verma, Director-General, Indian Sugar Mills Association (ISMA).
On Monday, raw sugar prices topped 20 cents a pound in Asian trade to be quoted at 20.10 (₹33,100 a tonne). White sugar prices in London ruled at $498.2 a tonne (₹37,000) .
In contrast, sugar prices in India are quoting at ₹31,500 a tonne in North India and ₹33,500 in Maharashtra. “Mill prices have gone up ₹200 a quintal since the weekend,” said AT Mohan of Chennai-based brokerage firm M.A.T and Sons.
Sugar prices have surged in the global market on dry weather and frost affecting sugarcane production in Brazil, the No 1 producer.
Brazil factor
“Brazil has reported to have gone through an unprecedented dry weather not seen in the last 90 years and frost has also affected production. Sugar output is seen lower at 31 mt, while some peg it even further down at 29 mt,” said ISMA’s Verma.
“For the next season, we have already sold six lakh tonnes without any assistance from the Centre. We will be able to do well on the export front if raw sugar prices do not drop below 19 cents,” said AISTA’s Vithalani.
“The sale of 6-8 lakh tonnes for the next season is just a trade (forward). The buyer will have to make available a vessel. But shipments will take place to the usual importing nations such as Indonesia and Bangladesh,” said MEIR’s Shaikh.
“The surge in global prices gives us an opportunity. Bangladesh imports 2.5 mt of sugar. If Brazil is unable to meet its demand, India can step in. It will provide us with some space. Even the Middle-East (West Asia), which looks to Brazil for supplies, is showing interest in our raw sugar,” said Verma.
M.A.T and Sons’ Mohan said Kolkata buyers were willing to pay a higher price for sugar. “Trade for next season is happening since we don’t have much time to export before the end of the current season on September 30. The current global trend is benefiting Indian sugar mills,” said Shaikh.
| Date: | 17 Aug 2021 |
| Source: | The Hindu Business Line |
| Reporter: | Subramani Ra Mancombu |
| News ID: | 49981 |
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