India Likely to Cross Record 55 Lakh Tonnes of Sugar Exports

India is likely to export a record 55 lakh tonnes of sugar for the season of 2019-20, according to top industry officials. Sugar millers have signed contracts for 52 lakh tonnes and 48 lakh tonnes has already moved out, Prakash Naiknavare, MD, National Federation of Cooperative Sugar Factoriess (NFCSF) stated. Exports could hit a high of 55 lakh tonnes, given the fact that millers have time till September 2020 to export sugar, he said.

India’s highest exports had touched 49 lakh tonnes in 2007-08 of which Maharashtra’s share was 29 lakh tonnes. Now we have already crossed 48 lakh tonnes, he pointed out. More export will help control inventory and also improve domestic prices, he said. Exports from India in 2018-29 were 38 lakh tonnes and 6.4 lakh tonnes the year before.

Brazil has diverted around 46-48% of its cane to sugar production and is expected to produce around 360 lakh tonnes as against 260 lakh tonnes last season thereby producing an additional 100 lakh tonnes of sugar for the world market.

In 2018-19, Brazil had diverted 30% of its cane and 33% the year before for sugar production But the lockdown has hit Brazil hard, Naiknavare said. The quantity that India has contracted and also exported is almost 50% raw and 50% white and these markets are still hungry for sugar because of what has happened in Brazil which is the world largest exporter, he pointed out.

Work at Brazil’s largest port Santos has slowed down to the lockdown and because of the absence of labour, loading which normally took 12-15 days is now taking 45 days, Naiknavare revealed. This means the sugar coming from Brazil will be delayed by around 45 days, he
explained, adding that this gives India an additional window or 10-15 days for export. The federation has been appealing to millers to enter into contracts so that they do not lose advantage and many millers have done so, he explained.

International prices which are currently high from 11.7 cents per pound three weeks ago to 12.25 cents per pound and once prices come down due to the influx of sugar in the world market, India will lose the advantage, he said. So far for India the major demand has come from Iran, Indonesia and Bangladesh. Quantities over 300,000 tonnes also went to Malaysia for the first time, and all niche African markets. Although exports had slowed during the lockdown period, timely intervention from the food ministry, concerned port authorities, shipping ministry, and railways and coordination between them led to exports picking up, he said.

Source: FE

Image Courtesy: Booker Tate