No plans to cap exports of sugar, says Centre

The Indian Government has no plans to cap exports of sugar, though it will keep a tab on the volume getting shipped to ensure ample quantity is available during the off season, official sources said on Friday.

The comments come on the heels of reports that the Centre plans to cap sugar exports at 80 lakh tonnes (lt).

“There is a section which wants a cap (on sugar exports), so that deals are finalised at the earliest which is good for the country,” an official, who did not wish to be identified, said. 

Crushing to end

Sugarcane crushing across the country will likely stop by end of this month or early next month. This will result in raw sugar production ending for the season, but white sugar will be available until the end of the current season on September 30. 

Till now, exporters have signed deals to ship about 72 lakh tonnes of sugar - most of it in the raw form. Of this, 47 lakh tonnes have been exported till February-end from October 1 -the start of the season.

Various estimates are being put out on prospects of sugar exports with private millers apex body Indian Sugar Mills Association estimating a fresh high of 75 lakh tonnes of shipments this season. Last season, exports were a record 71 lakh tonnes.

Pick-up in demand

But with demand for Indian sugar picking up following the Russia-Ukraine conflict and crude oil prices soaring to near $120-a-barrel levels, chances of exports topping 85 lt are seen bright.  In the past three weeks, deals have been signed to ship out 15 lt. 

However, sources say there is nothing to worry about. Official sources said sowing of sugarcane for the next season has already begun. “Looking at that, there is no cause for worry warranting any policy measure to impose quantitative restrictions,” the official said. 

All India Sugar Traders Association President Praful Vithalani said the Centre would have to ensure that sugar stocks were 60-65 lt on October 1 this year.  “Apart from the need to have opening stock of 60-65 lt, we have to provide for the consumption of 275-80 lt,” he said, adding exports could be sorted in a way to ensure this. 

Availability and carryover

Official sources said with a carryover stock of 85 lt from the last season and sugar production estimate has now been raised to 340 lt, and the total availability would be 425 lt.

Assuming that domestic consumption will be 270 lakh tonnes and exports 80 lakh tonnes, the country would still be left with 75 lakh tonnes of sugar, higher than the lean season requirement of 65 lakh tonnes. (See Table)

The lean season requirement is important since it is the festival period. Sugarcane crushing begins only after October 15 and by the time sugar in the new season arrives in the market it would at least be November 1.  Having such stocks at hand will help temper any surge in price during the festival season and ensure consumers are not affected. 

VR Sagar, Director, Bulk Logix, said there has beena huge demand for sugar outside India since the Russian troops entered Ukraine on February 24. The global market is taking note of the crushing season coming to an end as is evident from the movement of white sugar prices in London in the past month. “It has increased from levels of $495 to $545 now,” he said. 

(With inputs from Subramani Ra Mancombu, Chennai)

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