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HomeIndustry & UpdatesSugar Exports: Prospects for sugar exports are encouraging for SY 2022: ICRA

Sugar Exports: Prospects for sugar exports are encouraging for SY 2022: ICRA

Prospects for sugar exports are encouraging for next sugar season (SY2022) on account of recent surge in international prices of raw sugar prices, according a note by rating agency ICRA.

Even as sugar prices have been trending higher since beginning of calendar 2021 anticipating lower global surplus position for the commodity, the recent sugar production data for Brazil pointing to further contraction in country’s volumes for the season aided in further uptick in international raw sugar prices, ICRA said.

This has led to Indian traders signing sugar export contracts for SY2022 in advance, even before the start of the season, under open general license (OGL) as against usual practice of entering export contracts post Government of India’s export policy announcements.

The export prospects look promising for upcoming sugar season even if the subsidy moderates from current levels.

“Indian sugar industry could turn out to be a direct beneficiary of decline in the Brazilian sugar production. The firmed up global prices along with wider export market to cater especially neighbouring countries amidst logistics challenges pertaining to rising ocean freights, container shortages as well as port closures augers well for the industry. In the backdrop of estimates of normal sugar production at around 31 million MT (post ethanol diversion), encouraging export prospects coupled with higher expected sugar diversion towards ethanol would allow sugar companies to reduce stock levels and thus improve cashflows along with reduction in debt burden, ” said Sabyasachi Majumdar, Senior Vice President & Group Head,


Brazil is traditionally the largest sugar-producing and exporting country. While Brazilian sugar production was expected to witness a moderation for 2021/2022 (on going sugar season from April-March) since beginning of CY2021 owing to drought, the frost incidences in recent months and lower production data released recently by UNICA has resulted in downward revision in production estimates for the country. The country has progressed more than half way through the crushing season with witnessed decline in sugar production of 7.3% Y-o-Y in CS Brazil Region (contributed 93% of total sugar production in 2020/21) of which São Paulo region witnessed decline of 11.6% Y-o-Y (contributed over 60% of total sugar production in 2020/21).

The international prices of raw sugar have shot up in August 2021 to above USD 430/MT (19-20 cents/lb), and have been on an upward trend since February 2021 from around USD 340/MT (15.5 cents/lb). The release of sugar production data for Brazil, the largest producer of commodity globally in August 2021 by UNICA conveying a drop of 7.3% Y-o-Y (at 304 million MT for the period of April-July 2021 in south central region (CS Brazil)) and the resultant compression in the global surplus in the ongoing sugar season 2021/2022 underpinned the price rally in past few days.

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