India has signed deals to export at least five lakh tonnes (lt) of sugar in the past week after the Russia-Ukraine crisis deepened even as the Indian Sugar Mills Association (ISMA) has raised its projections for the commodity’s shipments to 75 lt for the current season (October 2021-September 2022). 

“Considering recent International Sugar Organization report indicating a global deficit of around 1.93 million tonnes for 2021-22 sugar season (October-September) and interest of exporters to buy more Indian sugar, ISMA members agreed that sugar exports will be higher than previously expected, and India will export 75 lt of sugar in the current season, as against 60 lt estimated earlier,” ISMA said in a statement issued on Friday.  

ISMA has raised its projections from the previous estimate of 60 lt.  

“Indian sugar is in demand more after the Russian-Ukraine conflict deepened. Exporters have signed at least five lt more for shipments,” said Rahil Shaikh, Managing Director, MEIR Commodities India. 

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India is the world’s second-largest sugar producer after Brazil.

ISMA revises sugar exports estimate upward to 7.5 mt

The easing of raw sugar prices after topping 20 US cents a pound to below 18 cents had resulted in Indian exporters going slow in signing fresh export deals. However, after Russia ordered its troops into Ukraine, sugar prices have increased nearly five per cent in the global market.

On Friday, benchmark raw sugar futures on New York’s Intercontinental Exchange were quoted at 18.94 cents ($420.8 a tonne).

Physical shipments

Shaikh said exporters could have actually signed 55-57 lt. “We could end up exporting 70-72 lt. Export estimates have been raised after production projections have been increased from 31 million tonnes to 33 million tonnes,” he said. 

According to ISMA, of the 60 lt of contracts signed about 42 lt are estimated to have been physically exported by February-end. Another 12-13 lt of sugar are expected to be exported in March 2022, taking the total to 54-55 lt of physical exports by then.  

In its statement on sugar production, ISMA said about 516 sugar mills in the country have together produced 25.28 million tonnes of sugar till February 28 from October 1, compared with 23.48 million tonnes produced by 503 mills last season during the same period a year ago.  

Output estimate hiked

The ISMA Committee comprising of sugar producers from across the country reviewed the sugar production in a meeting held on Friday. The all-India sugar production during the current season is expected to be 33.3 million tonnes, considering the diversion of 3.4 million tonnes of sugar equivalent to ethanol.

Sugar production estimates were initially pegged at 31 million tonnes but have been raised in view of better yield.

 “As per reports from sugar mills and estimations made by ISMA, sugar sales by the end of January 2022 has been estimated at 91.23 lt (87.69 lt) in the corresponding period a year ago, which is higher by 3.5 lt. 

“Further domestic sugar sales quota released by the government up to March 2022 is higher by 6 lt against the corresponding period last year. Considering the above, ISMA estimates domestic sugar consumption in the current season to be at 272 lt,” the statement said.

Ending stocks at 5-year low?

Considering an opening stock of about 82 lt as of October 1, 2021, domestic consumption of 272 lt, exports of 75 lt and the estimated production of 333 lt, the closing stock as of September 30, 2022 is expected to be at around 68 lt. 

This will result in the carryover stocks being the lowest in the last five years. 

(With inputs from Subramani Ra Mancombu)

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