Global sugar prices for raw and white sugar are currently prevailing at 20-25% more than the price which prevailed three months ago when India started its exports as against the 6 MT of Maximum Admissible Export Quota (MAEQ).
Sugar production till February 15 in the current sugar season (October 2019-September 2020) has dropped 23% and exports during the season are likely to cross the 5-million tonne mark, said apex trade body Indian Sugar Mills’ Association (Isma) on Tuesday.
Till February 15, sugar production was pegged at 16.98 MT as compared to 21.96 million tonne produced in the corresponding period of last sugar season. Of the 449 sugar mills which started crushing for the season 2019-20, as many as 23 mills have stopped crushing due to non-availability of sugarcane. Last year, 521 mills had operated, of which 19 had stopped crushing on the same corresponding date last year, said Isma.
Isma said there would be an estimated global deficit of 8-9 MT, according to experts in international trade.
Thailand’s exports are likely to be down by 3-4 million tonne due to lower production.
Global sugar prices for raw and white sugar are currently prevailing at 20-25% more than the price which prevailed three months ago when India started its exports as against the 6 MT of Maximum Admissible Export Quota (MAEQ). Accordingly, Indian sugar exports may get accelerated in the coming months, and could achieve more than 5 MT of MAEQ in the whole season.
Isma said India exported 1.6 MT of sugar so far and 3.2 MT of contracts have been signed for exports.
A few mills are not planning to export sugar against their allocated export quotas and few others have surrendered a part of their MAEQ to the government.
According to government’s decision, 20% of export quotas of mills, which have not contracted for 25% of their MAEQ by the end of January 2020, will be withdrawn and reallocated among the others which have exported most of MAEQ and are willing to export beyond their original MAEQ. It is understood that this process of reallocation is under active consideration and would be announced shortly, Isma added.
For the current sugar season, the government has allowed export of 6 MT under MAEQ to help deal with surplus sugar. India had exported 3.8 MT during 2018-19 marketing year against the mandatory quota of 5 MT.