Sugar exports to cross 5 mt this year

The country’s sugar exports may cross 5 million tonnes (mt) in the current marketing year ending September. Global demand will be higher because of a production deficit of 8-9 mt, industry body Indian Sugar Mills Association (ISMA) said on Tuesday.

However, this will still fall short of the 6 mt sugar exports goal set by the government under the Maximum Admissible Export Quota (MAEQ) to help deal with the glut in sugar production in the 2018-19 marketing year. In the last sugar season, India had exported 3.8 mt against the mandatory quota of 5 mt.

Prices go up

ISMA, quoting analysts said the global sugar prices have gone up by 20-25 per cent in the last three months, making it profitable for Indian sugar firms that are striking up new export deals. This northward movement in sugar prices will mainly benefit the sugar mills that have adhered to the government policy of exporting 25 per cent of their prescribed quota in October-December 2019 quarter.

An official notification issued in January had said the firms that did not meet the quota requirement may have to forfeit 20 per cent of the MAEQ, which will be reallocated to those who fulfilled it. It is not clear, however, how many firms have fallen short of this requirement and how much of sugar exports redistributed among other sugar mills.

“Apart from the difficult situation faced by many mills in Maharashtra and Karnataka during the monsoon floods last year and the pending export subsidy of ₹2,000 crore from the government made it difficult for many sugar companies to meet the target,” said an industry representative.

ISMA, quoting market reports, said about 1.6 mt sugar has been exported so far and contracts have been signed for exporting an additional 3.2 mt.

Sugar output

Meanwhile, the industry body said sugar mills in the country have produced 17 mt of sugar till February 15, nearly 23 per cent lower than the 22 mt sugar produced in the corresponding period of the previous sugar season.

With prices of raw and white sugar ruling 20 to 25 per cent higher in the global market than three months ago, Indian mills have a good chance of getting better prices for their exports. According to analysts, there is eight to nine million tonnes shortfall in global production of sugar in the current sugar season.

Mills in Uttar Pradesh produced 6.6 mt of sugar, compared with 6.4 mt last year. Their counterparts in Maharashtra produced 4.3 mt, as against 8.3 mt in the same period last year. Karnataka mills’ contribution so far was 3.1 mt as against 3.9 mt a year ago.

Mills in other States such as Tamil Nadu, Gujarat, Andhra Pradesh, Bihar, Chhattisgargh, Haryana, Madhya Pradesh and Punjab contributed the rest.

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