NEW DELHI : The Indian Sugar Mills Association (ISMA) said India is likely to extend the limit of sugar exports by 2-4 million tonnes in the 2022-23 season. The move will leave total exports at 8-10 million tonnes and below last year’s level.
Rahil Shaikh, Vice-President of the All India Sugar Traders Association, talked about the agreements with various mills for the export of a total of 60 lakh tonne of sugar which would be completed by December while the physical deliveries to be executed by March-end.
India, which is the world’s biggest sugar producer and the second biggest exporter after Brazil, exported over 11 million tonnes of sugar in the October-September season of 2021-22.
The government earlier this month approved a first tranche of exports for 2022/23 at 6 million tonnes in a move that helped cap recent upward pressure on benchmark ICE sugar prices.
After last year’s record 112 lakh tonne of exports, Indian millers talked about another year of good overseas sales. The central government had issued a mill-wise quota for exports with a total 60 lakh tonne of sugar expected to be shipped out in the first tranche. The industry hopes that the government would allow exports of 20 lakh tonne of further exports once the first lot is exported out.
Shaikh, who is also the MD of MEIR commodities, an export-import firm, said they have seen good demand from countries like China, Bangladesh and countries in the Horn of Africa.
“Definitely there will be a second tranche … between 2-4 million tonnes, depending on production,” quoted Aditya Jhunjhunwala, President of ISMA, as saying on the sidelines of the International Sugar Organisation seminar in London.
He said India would likely produce 36 million tonnes of sugar and 5 million tonnes of ethanol.
Indian consumption is at around 27-27.5 million tonnes, so that leaves 8.5-9 million tonnes for export, he said, adding mills have already signed contracts to export 4 million tonnes of sugar.
However, the good demand has seen many mills trying to or renegotiating their contracts for exports. This, exporters pointed out, was for commanding higher prices for the exports. Mills in the past had signed contracts of exports at prices which were lower than the present prices. Industry sources said post the demand for sugar, the international prices have jumped a few cents which saw a significant number of mills trying to renegotiate their contracts. “This has had an effect in the international markets. Other than price rise, this can also cause problems for future contracts,” said an exporter on condition of anonymity.
Meanwhile, the sugar season in Maharashtra as well as Uttar Pradesh has been racing ahead. While it is early, mills in Maharashtra have talked about a drop in per acre yield which might affect the production figures at the end of the season.