Millers expect better realisations aided by a weaker rupee
The rebound in global white sugar futures on concerns over delay in Brazilian harvest has augured well for Indian exporters.
“Exports are happening at a good pace with demand coming from West Asia, Bangladesh and Sri Lanka,” said Mr Abinash Verma, Director-General, Indian Sugar Mills Association.
Sugar futures on both London and New York terminals rebounded over the past fortnight on concerns of rains delaying harvest in Brazil and Australia.
The concern over cane diversion in Brazil to produce ethanol amid shortfall in corn supplies is also seen as aiding the price trend.
White sugar futures for August delivery gained $3.90 on the London terminal to close at $650 a tonne on Tuesday.
Since June 28, the futures for August delivery on the London terminal have gained about 8.5 per cent.
The ICE raw sugar futures have also entered a bullish phase in recent days and are hovering around 22.5 cents a pound.
“There is more demand for raw sugar compared with white or refined sugar. But the white sugar exports are also happening,” said Mr Vinay Kumar, Managing Director, National Federation of Co-operative Sugar Factories (NFCSF).
Most of the importers, especially in West Asia, prefer to import raw sugar and refine it in their own refinery, Mr Kumar said.
Raw sugar exports are mainly taking place from Tamil Nadu, where crushing is going on.
Exports pick up
Indian exports have picked up ahead of Ramzan and realisations for millers, aided by a weaker rupee, are expected to be better.
“We have physically exported about 25.5 lakh tonnes so far, while another 2-3 lakh tonnes is in various stages of being shipped out,” Mr Verma said.
Indian millers have so far exported 28 lakh tonnes in the current 2011-12 season beginning October.
“We expect to ship out another 7-8 lakh tonnes,” he added.
The delay in harvest in Australia and Brazil due to heavy rains may help Indian exporters grab a larger pie of the Indonesian market, where demand is seen strong, agency reports from Jakarta said.
ISMA has forecast an output of 25 million tonnes for 2012-13 season starting October.
This is one million tonne lower than the 26 m.t projected by the industry body for the current year.
The lower forecast, despite higher cane acreage, is mainly on account of inadequate rains impacting yields and recovery in the key growing States of Maharashtra and Karnataka.
HITTING A SWEET SPOT Sugar futures on both London and New York terminals rebounded on concerns of rains delaying harvest in Brazil and Australia The delay in harvest in Australia and Brazil may help Indian exporters grab a larger pie of the Indonesian market Indian millers have so far exported 28 lakh tonnes in the current 2011-12 season beginning October