The government has allowed exports of one million tonne of sugar since its notification on May 24 to regulate outbound shipments to keep local supplies steady, a senior official told FE.
Sugar exports, however, will likely drop to about 7-8 million tonne in the next marketing year starting October, from 10 million tonne in 2021-22, said the official. Greater diversion of cane juice to produce ethanol, robust domestic demand and the need to replenish the somewhat depleted year-ending inventory are expected to keep a lid on the exportable surplus of sugar in 2022-23. However, the food ministry will decide whether to impose a cap on sugar exports in 2022-23 in one-two months, once a precise production estimate for the next year is firmed up, he added.
India had shipped out only 620,000 tonne of sugar in 2017-18, 3.8 million tonne in 2018-19 and 5.96 million tonne in 2019-20. Last year, against the target of 6 million tonne, about 7 million tonne of sugar was exported.
While announcing an export cap of 10 million tonne for 2021-22, the food ministry had said late last month that about 9 million tonne had been contracted for outbound shipments until then. Of this, about 8.2 million tonne was dispatched from sugar mills for exports and a record 7.8 million tonne had been physically shipped out.
Diversion towards ethanol could rise to about 4.5-5 million tonne next year, against 3.5 million tonne in 2021-22, said the official. The government has estimated that year-ending sugar stocks will likely drop to just about 6.5 million tonne in 2021-22 (which is enough for the consumption for about three months), down from 8.9 million tonne a year before, according to the source.
FE had earlier reported that India, the world’s second-largest sugar producer, exported 3.06 million tonne of the sweetener between April 1 and June 2, 53% higher than a year before. The unusual surge prior to the imposition of the curb lent some credence to the government’s fears that sugar stocks could be substantially depleted by the festival season if outbound shipments were allowed unhindered. The cap is aimed at ensuring adequate availability of sugar in the market until production from the new crop hits the market in October-November.
Having notified its plan to regulate sugar exports, the food ministry had, last month, asked sugar mills to seek permits from the directorate of sugar to ship out the sweetener between June 1 and October 31, and file details of despatches with the directorate’s portal on a daily basis.
The cane crushing season starts in the last week of October in Karnataka and Maharashtra and in November in Uttar Pradesh. So, up to November, the supply of sugar typically takes place from the previous year’s stocks.