Sugar mills are going slow on signing new export contracts amid the fall in global raw sugar prices. However, with lower output in Brazil, the world’s largest producer, the mills are hoping the prices will firm up for the sweetener.
“Signing of further export contracts have slowed down a bit during the last fortnight or so due to a fall in global prices of raw sugar to around 19 cents/pound,” Indian Sugar Mills Association (Isma) said in a statement.
Isma said the global prices have recovered to some extent and are hovering around 19.5 cents per pound but exports are still not viable for Indian sugar.
There is a general opinion that as more than nine months are still left in the current season, there is enough time for the sugar mills to wait for an opportune moment when they would like to enter into export contracts, it noted.
In the first two months of the ongoing 2021-22 season that started from October, sugar mills have exported over 6.5 lakh tonnes of sugar compared with 3 lakh tonnes in the year-ago period.
Sugar mills have contracted for export of 37 lakh tonnes so far in the current season, it said.
However, most of these contracts were signed when the global raw sugar prices were in the range of 20-21 cent per pound.
“The international trade houses are also of the opinion that the world (sugar) prices will need to move up from the current levels if the world wants Indian sugar mills to export another couple of million tonnes of sugar in the next 7-8 months or so,” Isma said.
The country’s sugar production reached 77.91 lakh tonnes till December 15 of the ongoing 2021-22 season, higher than the 73.34 lakh tonnes a year ago.
Food secretary Sudhanshu Pandey last week said he expects sugar exports to reach 50-60 lakh tonnes in the current marketing year, which begins in October.
“We have noticed that direct export support to the industry has totalled over Rs 13,000 crore in the last five years to six years. And it didn’t stop there. The government also provided help for buffer stocks,” he stated.
