Sugar exports beat lockdown blues, might contact 65 lakh tonne

Increased demand from worldwide markets has seen India’s sugar exports contact a brand new excessive. Till date, contracts of 59 lakh tonne have been signed, of which 43 lakh tonne have already been shipped in a foreign country.
Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Limited, stated there are possibilities of the nation exporting greater than its quota of 60 lakh tonne, with some mills even taking to exporting sugar with out profiting from the federal government subsidy.
At the beginning of the 2020-21 sugar season, the central authorities had introduced a Rs 3,500 crore subsidy programme to ship out 60 lakh tonne of the sweetener. Aimed at lowering the sugar glut within the home market, mills might this subsidy after finishing their quota. This would be the second 12 months in operating when the nation has seen a subsidy programme for sugar exports to assist the sector scale back stock. This can be the second 12 months in a row when India can be recording good exports. Last 12 months, round 59 lakh tonne of sugar was exported.
In spite of the second wave of coronavirus infections, worldwide costs of sugar have seen regular good points, primarily on the backdrop of crude costs. Brazil, the world chief in sugar manufacturing, had diverted a considerable portion of its cane crop in direction of manufacturing of ethanol, prompting a downward revision in its sugar manufacturing. Many markets historically cornered by Brazil have now turned in direction of India to satisfy their sugar wants.
Naiknavare stated the export basket had an equal share of uncooked and white sugar. Countries akin to Indonesia and Afghanistan have been the highest locations for Indian sugar, whereas African international locations have emerged as main markets for uncooked sugar.
At current, ex-mill realisation of exported sugar is round Rs 2,900/quintal and the subsidy quantity is sufficient for mills to make a neat revenue.
“A portion of white sugar is also being brought by Indian-origin refineries for middle-east markets,” stated Naiknavare.
What makes this season attention-grabbing is the willingness of mills to export sugar with out the subsidy below what known as ‘open general licence’. “The present international prices are good enough for such exports, which would help mills reduce their inventory as well as save on bank interest,” stated Naiknavare.
He stated round 5 lakh tonne of the sweetener could possibly be exported on this vogue. The National Federation has been urging its members to benefit from the upper worldwide costs. Asked concerning the subsidy quantity pending with the federal government, Naiknavare stated majority of the pending subsidy has been cleared, with round Rs 500 crore nonetheless pending. “That too will be cleared once the Finance Ministry transfers the funds,” he stated.

The present 12 months has been good for the sugar sector, with home gross sales additionally remaining wholesome. Unlike earlier forecasts of low gross sales as a result of Covid-19 lockdown in April, gross sales have been good, particularly from industrial consumers. “Last year, we had seen domestic consumption dropping to 250 lakh tonne but this year, we feel domestic consumption would be around 255 lakh tonne,” he stated.
In case the trade experiences 65 lakh tonne of exports, the opening inventory for the 2021-22 sugar season, which begins in October, will fall beneath 100 lakh tonne. After years of extra inventory, this could be a welcome change for the trade as ex-mill costs are going to be ok for mills to pay cane farmers on time.