India, the largest sugar producer and the second largest sugar exporter in the world behind Brazil, has entered into a contract for the export of about 35 lakh tonnes of sugar so far in the ongoing 2022-23 season, out of which about 2,00,000 tonnes have been shipped as of October as per ISMA (Indian Sugar Mills Association).
As Per Rahil Shaikh, The Managing Director Of MEIR Commodities
Rahil Shaikh has said that India is likely to sign several agreements for sugar export by Devember’22 due to its production of the designated 60 lakh tonnes of sugar and since the deliveries ought to be completed by end of March’23. He further asserted that there is a ‘high demand’ for Indian sugar in the global markets.
Shaikh also said that the maximum demand for sugar was from countries including China, Bangladesh, and nations in the Horn of Africa. “I think the contracts would be signed by the end of December 22 and around 60 lakh tonnes of sugar would be exported by the end of March 23.
Indian Sugar Exports
Owing to the promise of bumper production, sugar millers are currently making deals with importers overseas beforehand. The ISMA had noted that several traders had entered into export contracts for the 2022-23 season much before the export policy was announced by the government.
In 2021, the country had exported a record 112 lakh tonnes of sugar to the global markets. Indian millers have been eying another good year of sugar exports and the central government had issued a mill-wise quota for the export of the commodity, with an estimated 60 lakh tonnes of sugar to be exported in the first tranche. The industry, in the meantime, hopes that the government would allow the export of 20 lakh tonnes of sugar once the first batch is exported.
Due to the rise in demand, several sugar mills have been trying to renegotiate their export contracts.
The Sugar Export Contracts
As per exporters, they were in a bid to command higher prices for sugar exports as in the past, sugar mills had signed contracts for exporting sugar at prices lower than the current amount. According to sources in the industry, following the increase in demand for sugar globally, the prices in the international markets have jumped a few cents, and thus a significant number of mills have been trying to renegotiate their contracts. “This has affected the international market. Other than raising the prices, renegotiations can also cause future problems for agreements,” said an anonymous exporter.
Meanwhile, the sugar season in Maharashtra and Uttar Pradesh has moved forward at a good speed. While it is early, the mills in Maharashtra have been considering a drop in the per-acre yield, which might affect the production figures at the end of the season.
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