Indian sugar mills and traders are all set to witness a bumper export season with the international price of sugar at a four-year high of around 20 cents/lb and sugar flow from Brazil drying up.
The India Sugar Mill Association (ISMA) in a press statement said that Brazil will have lower sugar production in the current sugar season (April 2021 – March 2022), owing to dry weather conditions due to drought followed by the incidence of frost. As a result, world prices are expected to remain bullish.
Brazil’s next sugar season may also be affected by the worst-ever drought in Brazil in the last 90 years. Due to this, many global agencies including ISO have projected a higher sugar deficit to the tune of 4-5 million tonnes (MT) in the next 2021-22 sugar season starting on October 1, 2021.
Rise in export
ISMA said, “It is also reported that many sugar mills have signed forward contracts for export in the upcoming season. It is believed that Indian sugar mills will avail this opportunity and be able to export to the tune of 60 lakh tons of sugar during the next season also.”
According to ISMA, as per port information and market sources, about 66.70 lakh tons of sugar has been physically exported out of the country in the first 11 months of the current sugar season (1 October, 2020 to 31 August, 2021) period. This is almost 11 lakh tons more than the 55.78 lakh tons exported during the corresponding period last season.
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“This figure for the current season also includes about 4.49 lakh tons of exports done under Maximum Admisdible Export Quota (MAEQ) of 2019-20 sugar season, which was extended up to 31 December, 2020. It means about 62.21 lakh tons of sugar has been physically exported during January to August, 2021 period, mostly under MAEQ of 2020-21 sugar season and some quantity under Open General License,” the ISMA added.
As of September 6, 2021, about another 2.29 lakh tons of sugar is at the ports, either loaded on to vessels or in godowns waiting for more vessels to arrive. This would mean that considering the 20 days left in the current season, total exports in the current season could cross 70 lakh tons.
Out of the total estimated exports so far, a total of about 34.28 lakh tons of raw sugar, 25.66 lakh tons of white sugar and 1.88 lakh tons of refined sugar have been delivered or moved for exports by mills. Additionally, mills are reported to have delivered about 7.17 lakh tons of raw sugar to port-based refineries for refining and exports.