India may curb sugar exports in the next season
Mumbai:
Industry and government sources said on Friday that India may impose limits on sugar exports for the second year in a row from this October, with the aim of ensuring adequate domestic supply and keeping local prices under check.
India, the world’s largest sugar producer, may limit sugar exports to 6 million to 7 million tonnes in the 2022-23 October-September season, which is about a third less than the current season, industry and total exports. Government sources said. He asked not to be named as he was not authorized to speak to the media.
A government spokesman did not immediately respond to a request for comment.
Traders said a ban on exports by India, which is also the world’s second largest sugar exporter, could further push up benchmark white sugar prices, which are already trading at 5-1/2-year highs .
Factors driving global sugar prices this year are low sugar production in Brazil, a major producer and largest exporter, and crude oil prices at several years’ high. Higher crude oil prices encourage sugar mills to plant more cane to produce ethanol for blending into gasoline.
Brazil’s sugar production is set to rise again during the current season, but with restricted exports from India, traders do not expect prices to drop and may instead increase further.
A senior government official with knowledge of the matter said, “There is a need to control exports to avoid any panic in the market.
Sources said that the sources expect the export limit for the next season to be between 6 million to 7 million tonnes, but the exact quantity will be decided closer to the beginning of the 2022-23 season.
He said the government would look into the performance of monsoon before deciding the quota.
Monsoon rains in the sugarcane-growing regions of Maharashtra, the country’s largest producer, were 60 per cent below average since the start of the rainy season on June 1, according to data from the Met Office.
New Delhi on May 24 banned the export of sugar for the first time in six years and fixed a limit of 10 million tonnes for this season.
Record exports in the current season could bring inventory to 6.5 million tonnes on October 1, when the next 2022-23 season begins, from 8.2 million tonnes a year ago, industry and government estimates show.
Aditya Jhunjhunwala, president of the Sugar Mills Association of India, a producing body, has requested that the government allow mills to export 8 million tonnes of sugar next year, as production may exceed this year’s record 36 million tonnes, as per reports. Seen by a letter. Reuters. The association did not immediately respond to a request for comment.
The letter also urged the government to take an early decision on next year’s export quota to help mills cash in on firmer global prices.
India mainly exports to Indonesia, Bangladesh, Sudan, United Arab Emirates, Nepal and China.