India is set to allow sugar exports in two phases for the next season starting in October, as the world’s largest sweetener tries to balance the interests of its farmers and consumers, government and industry officials told Reuters. told.
Exports by India, which has restricted shipments in the current season, could weigh on global prices, and help supply across Asia.
“The government has started the process of allotting quota for the next session,” said Prakash Nayaknavare, managing director of the National Federation of Cooperatives. sugar factory Ltd.
The export policy for the 2022/23 season, starting October 1, is likely to be announced in September, he said.
According to official rules, a senior government official, speaking on condition of anonymity, said New Delhi may allow exports of 70 lakh to 8 million tonnes in the next season.
“But unlike previous years, most likely the government will allow exports of 40 lakh to 50 lakh tonnes in the first tranche this time and the rest in the second.”
India, which has been trying to rein in inflation from a multi-year high, recently banned wheat exports, curbed sugar exports and allowed duty-free imports of soy oil and sunflower oil.
In the current marketing year, India has restricted sugar exports to 11.2 million tonnes to reduce domestic prices after mills sold record volumes in the global market.
delicate balance
Rahil Shaikh, managing director, MEIR Commodities India, said the size of the second tranche of exports would depend on domestic production and price volatility.
“If domestic prices pick up, the government will allow small exports in the second tranche,” he said.
But before New Delhi unveiled the export policy, some traders signed deals to export 300,000 tonnes of raw sugar in the coming season due to higher global prices and a weaker rupee currency, trade sources said.
Naiknavare said, “We are advising mills to sign export contracts before the government announcement. “Global prices may fall after India announces quota.”
A Mumbai-based dealer of a global trading firm said India will have to allow exports as the next season’s production is estimated to be over 35 million tonnes against the local demand of 27.5 million.
surplus production will decrease sugar prices and limit the ability of mills to pay farmers the mandated price for sugarcane, the dealer said.
“Exports are needed to support local prices, but excessive exports can drive up prices. The government has to strike a delicate balance between the interests of farmers and consumers.”
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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