July 10, 2024

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India’s Sugar Sales Are a “Golden Opportunity” in a Stagnant Global Market

With the expectation that the government will soon publish international sales quotas for the season that begins this month, sugar producers in India are making agreements with traders and exporters.

According to Rahil Shaikh, managing director of trading firm Meir Commodities India Pvt., mills in the South Asian nation, which competes with Brazil as the world’s top sugar producer, have contracts in place for the export of about 1.2 million tonnes so far and plan to ship up to 8 million tonnes in the 2022–2023 fiscal year.

Amid worries that supplies may become scarcer, particularly in top exporter Brazil, Indian producers are attempting to profit from the surge in benchmark futures. Rain in the nation of South America’s Center-South, the primary growing zone, has reduced the rate of cane crushing, perhaps raising costs.

In contrast to the domestic pricing of 33 rupees, exporters are offering Indian mills roughly 35 rupees per kilogramme for low-quality white sugar, while raw sugar is fetching a price of 33.5 rupees from foreign customers, according to Shaikh. According to him, foreign purchasers are willing to pay 38.5 rupees for the refined variety, which sells for 36 rupees on the local market.

According to Shaikh, Indonesia and Bangladesh are among the countries that import raw sugar, while low-quality white sugar can currently be exported to Afghanistan, Sri Lanka, and the Horn of Africa for direct consumption due to strong demand. He claimed that the Middle East, Sudan, and Somalia could all buy the refined variety.

According to the Indian Sugar Mills Association, domestic sugar production is expected to be 35.5 million tonnes this year, while domestic sugar consumption is anticipated to be 27.5 million tonnes. India, which has customers including Indonesia, Bangladesh, Malaysia, and Dubai, was the second-largest sugar exporter after Brazil in 2020–21.

“The issue of domestic supplies should not concern the government. Exports should be possible soon, according to Shaikh. “They can always restrict, like they did last year if they feel that control is needed.”