Sugar Production Up 42% In Oct-Dec At 110.22 Lakh Tonne: ISMA

According to trade data, India’s sugar output increased 42% on year-on-year basis in the October-December 2020 period to 110.22 lakh tonnes on higher cane production and an early start of milling in Maharashtra.

The Indian Sugar Mills Association (ISMA) reported in a statement that in the October-December period of 2020-21 sugar marketing year, mills produced 110.22 lakh tonnes of sugar as compared to 77.63 lakh tonnes for the corresponding period last year.

In Maharashtra, in the period under review, sugar production stood at 39.86 lakh tonnes, compared to 16.50 lakh tonnes in the year-ago period. The production of sugar in Uttar Pradesh increased slightly from 33.16 lakh tonnes to 33.66 lakh tonnes.

At present, about 10 lakh tonnes of sugar export contracts are said to have been signed and sugar has already begun to flow to export.

The government has set a target of 60 lakh tonnes of sugar exports to liquidate surplus stocks in the period 2020-21, ending in September. ISMA stated, “Provided that global sugar prices were better in December 2020 compared to what they were in September 2019, when the government announced the export programme for 2019-2020.”

The government has limited the export subsidy for sugar exports to Rs. 6,000 (US$ 82.11) per tonne. However, it noted that the real costs incurred are far higher for internal transport, ocean freight and marketing and promotion charges.

In the second largest sugar exporting country, Thailand, the production of sugar is almost 80-90 lakh tonnes less than what they normally produce. Therefore, in addition to its own conventional markets in the Middle East, Sri Lanka, Bangladesh, East Africa etc, India has an advantages of exporting its sugar to Asian importing countries, in particular Indonesia and Malaysia,’ the statement said.

By March-April 2021, when Brazilian sugar enters the market, India has a strong opportunity to export sugar, ISMA said.

World trading takes place at the London ICE exchange for white sugar and the New York Exchange for raw sugar in relation to future costs. Sugar contracts are currently in effect in relation to the March futures, although the same will happen in a few months with respect to the May futures, which are slightly lower relative to the March futures.

ISMA said, “The global futures market is inverse and thus, as the season progresses, the prices of sugar exports are likely to be lower relative to what you are actually receiving.”

“Provided that the world needs Indian sugar and that the production of sugar is lower in Thailand, the EU, etc., India should be able to export its targeted volumes during 2020-21 with the help of Rs. 6000 (US$ 82.11) per tonne of export subsidy,” the ISMA said