Agri Business

Sugar exports seen at record 70 lakh tonnes despite Covid setbacks

Vishwanath Kulkarni Bengaluru | Updated on September 10, 2021

About 66.7 lakh tonnes shipped in the first 11 months

Overcoming the Covid-related supply chain challenges, India is seen shipping out a record 70 lakh tonnes (lt) of sugar for the current 2020-21 sugar year ending September. This represents a 17.64 per cent increase over the previous season’s 59.50 lt. This is the second consecutive year that Indian sugar exports are scaling new highs.

Abinash Verma, Director General, Indian Sugar Mills Association (ISMA), said the shipments could cross 70 lt for the sugar year 2020-21. So far, about 66.70 lt has been physically shipped out in the first eleven months (October-August) of the current season against 55.78 lt in the same period last year.

Further, as on September 6, another 2.29 lakh tonnes of sugar is at the ports, either loaded on to vessels or in the godowns waiting for more vessels to arrive. Considering that another 20 days are left in the current season, total exports in the current season could cross 70 lt, ISMA said in a statement.

Unfazed by challenges

Verma told BusinessLine that besides surplus output coupled with robust demand, the Indian exporters and sugar mills’ efficiency to move the cargo during the Covid times overcoming challenges such as shortage of trucks as well as labour and congestion at the ports has enabled the record shipments.

Further, Verma said that a couple of years ago, there was a talk in global trade circles that Indian sugar exports cannot exceed 5 million tonnes due to logistical challenges. “We have proved the world wrong. It has been a big effort from both sugar mills as well as exporters,” he added.

India’s sugar production for 2020-21 season is estimated at 310 lakh tonnes.

Out of the total estimated exports, so far, raw sugar had a higher share of 34.28 lt, followed by 25.66 lt of whites and 1.88 tonnes of refined sugar. Additionally, mills are reported to have delivered about 7.17 lt raw sugar to port-based refineries for refining and exports. The exports, so far, also includes 4.49 lt of shipments done under the MAEQ of 2019-20 sugar season, which was extended till December 31, 2020.

Key markets

Indian sugar is mainly exported to countries such as Indonesia, Afghanistan, Sri Lanka, Somalia, the UAE, China, Saudi Arabia, Sudan among others. Indonesia was the top most destination with 29 per cent share, followed by Afghanistan at 13 per cent of total exports.

Commenting on the outlook for the next season, Verma believes that India will be able to export about 60 lakh tonnes.

Brazilian crop

Currently, the international prices of sugar are at over four year high at around 20 cents per pound. Amid reports of lower sugar production in Brazil in its current sugar season (April,2021 – March,2022), owing to dry weather conditions due to drought followed by incidence of frost, the world prices are expected to remain bullish. It is also reported that Brazil’s next sugar season may also get affected due to the worst-ever drought in Brazil in last 90 years. Due to this, many global agencies, including International Sugar Organisation, have projected a higher sugar deficit to the tune of 4-5 million tonnes in the next 2021-22 SS, starting on October 1, 2021.

Further, sugar production in Thailand is likely to increase in next season as compared to previous years, but still will be lower than its normal production of 14-14.5 million tonnes, by almost 3-3.5 million tonnes. Thailand sugar would come into the market only after January, 2022. This would mean that Indian sugar mills have a good opportunity to export their surplus sugar in the next couple of months up to January 2022, and thereafter till April 2022 before Brazilian sugar comes into the market.

Verma said that many sugar mills have signed forward contracts for export in the upcoming season. “It is therefore believed and expected that Indian sugar mills will use this opportunity and will be able to export to the tune of 60 lakh tonnes during the next season,” he said.

Published on September 09, 2021

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