New Delhi, Feb 17 (IANS) The next three months of the ongoing 2019-20 season will be a golden opportunity for Indian sugar exports as India is likely to face a tough competition from Brazil in the global market in the next season, say experts.
After the recent rise in sugar prices in the global market, the production of sugar will prove to be more beneficial than ethanol for Brazil and it’s likely to focus more on producing sugar.
At present, India has surplus stock of sugar and this year the sugar prices have seen a sharp rise due to supply shortage and a higher global demand. This has made it easier for Indian mills to export sugar.
However, after the new season of sugar production begins in Brazil and Australia, the increase of sugar supply in the global market will increase competition for India.
The government has set a quota of 60 lakh tonnes of sugar exports under the Maximum Admissible Export Quantity for the country’s sugar mills for the current season 2019-20 (October-September), on which the government provides a subsidy of Rs 10,448 per tonne.
Experts say that the next three to four months will be important for sugar mills to meet the export quota fixed in the current season, because after that Brazil’s sugar will enter the world markets.
Adhir Jha, Managing Director and CEO of Indian Sugar Exim Corporation Limited (ISEC), told IANS that Brazil may produce more sugar than ethanol in the coming season, given the recent spurt in sugar prices in the international market. Sugar production may prove to be more beneficial for Brazil.
Brazil was the largest producer of sugar in the world until two years ago, but after the fall in sugar prices, it started producing more ethanol than sugar. India has been the world’s largest producer of sugar for the last two years.
Jha said that the price of sugar has increased recently, while the price of oil has come down. In such a situation, Brazil can produce more sugar than ethanol in the new season.
He said that Brazil does not have sugar stocks for export, at present, so it’s a good opportunity for India to export more and more sugar to other countries before the arrival of the new season.
India has so far signed more than 30 lakh tonnes of sugar exports deals in the current season.
Prakash Naiknavare, Managing Director of the National Federation of Co-operative Sugar Factories Limited, said India will achieve the target of exporting 60 lakh tonnes of sugar as India currently has sugar stocks to export and the export demand is also there.
Recently, the International Sugar Organisation (ISO) Executive Director Jose Orive has urged the sugar importing countries to buy sugar from India, saying that India has sufficient stocks of sugar for exports.
Naiknavre said that Orive’s statement comes the right time.
The prices of sugar in the international market is at the highest level since 2017. The price of raw sugar (US sugar-11) has gone up by 15 cents per pound, while that of white sugar (London sugar) has gone up to $456.60 per tonne last week.
According to the Indian Sugar Mills Association, sugar production in India is estimated at 260 million tonnes this year.
At the same time, the remaining stock of last year is about 145 lakh tonnes. Thus the total supply is 405 lakh tonnes while the annual domestic consumption is around 260 lakh tonnes.
If India exports 60 lakh tonnes of sugar in the current season, there will still be about 85 lakh tonnes of sugar stock available in the country by the end of this season on September 30, 2020.