India is poised to allow 5 million tonnes of sugar exports in the first tranche for the new marketing year beginning October, two government sources said on Wednesday.
“The permission to export 5 million tonnes of sugar is expected in the coming weeks and once we have a better sense about next sugar year’s production, we could allow another 3 to 5 million tonnes for exports,” said one of the sources who didn’t wish to be named in line with official rules.
Although it’s a little early to get a clear idea about next year’s production, early estimates suggest sugar output in 2022-23 would hover around this year’s record 36 million tonnes, the official said.
On Oct. 1, 2022, when the new season begins, mills’ carryover stocks from the previous season are expected at 6 million tonnes against 8 million tonnes a year earlier.
“After factoring in local demand, the need for ethanol production and mills’ requirement for their yearly carryover stocks, we believe that India will have a large exportable surplus in the 2022-23 year,” said the second source.
“But given the erratic weather patterns impacting crops and agricultural production, we do not want to allow exports of 8 or 9 million tonnes in just one go,” the second source said. “We’ll be rather cautious.”
India banned wheat exports earlier this year and last week imposed curbs on rice shipments as adverse climatic conditions hit output and planting.
India’s domestic sugar consumption is estimated at around 27.5 million tonnes and mills are expected to divert 4.5 million tonnes of sugar for ethanol production in the 2022-23 season. Mills will also set aside at least 6 million tonnes of sugar as their annual carryover stocks.
Cashing in on attractive global prices traders have already signed deals to export 400,000 tonnes of raw sugar for the 2022/23 season.