Indian mills are holding off on signing new sugar export contracts for the upcoming season as a rally in domestic prices to a four-year high widened the gap between local and global rates, industry officials told Reuters.
“Mills are not signing export contracts, as they are getting far higher prices in the local market,” said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd.
Lower shipments from India could support global prices, as supplies from top producer Brazil are expected to decline, and traders were banking on India to compensate for the shortfall.
After shipping out a record 7.5 million tonnes of sugar in the current season, Indian mills have so far signed contracts to export 1.2 million tonnes in the 2021/2022 marketing year that starts from Oct. 1.
The bulk of those deals were signed in August, but a surge in domestic prices has since cut new contracts almost to zero, dealers said.
