Located in South Asia-India is the largest producer of sugar and ranks second when it comes to sugar exports, behind Brazil who is the biggest sugar exporter in the world. Enjoying strong demand, every year, India exports huge quantities of sugar to the world. However, this year has been a different one.
The Russian invasion of Ukraine which started in February caused disruptions in the supply chain and ultimately fueled the prices of several food and agro-commodities around the world. Owing to strong demand and sky-high prices, Indian sugar suppliers, exporters, and millers exported record volumes of sugar in the month of May.
This coerced the government of India to take steps and with a view to ensuring domestic availability and price stability, the GOI for the first time in six years imposed restrictions on the exports of sugar for the current marketing season.
With the current marketing season nearing the end and sufficient quantities of sugar in the domestic market, sugar exporters and millers were hoping the commodity to be back in the “free to trade” category. However, the government extended the export of sugar on a quota basis for the upcoming marketing season and this brought disappointment on the faces of sugar suppliers, millers, and exporters of the country.
Nevertheless, the government allowed exports of sugar to the tune of 6 MT till the 31st of May,2023 on the 5th of September 2022 which was welcomed heartily by the sugar exporters and within days of the approval, Indian sugar millers and exporters signed deals of around 1 million Tons for exports so far.
Indian Sugar Mills Aggressively Signing Export Deals
Owing to higher prices of the sweetener that the sugar millers and exporters are receiving in the global markets, Indian sugar mills are aggressively signing export deals.
Around Rs 2,000 to Rs 3,000 per tonne are being offered extra to Indian sugar millers in the global markets and as a result, the Sugar Exporters are interested in the overseas sale this year. Owing to this, Indian sugar exporters have already signed deals to export about 1 million Tons of sugar so far.
Public Reaction
The Indian sugar industry in general and sugar exporters, in particular, were long waiting for the GOI’s decision to export sugar. As a result, as soon as the policy was announced, the sugar millers, traders, and exporters started signing export deals.
There is generally positivity and optimism in the market with the resumption of sugar exports and going by the current trend, the Indian Sugar Mills Association (ISMA) expects the government to allocate the second tranche of 3 million Tons over and above the current approved limit of 6 million Tons for the first half of the current marketing season.
Conclusion
The government of India on the 5th of September 2022, announced the resumption of sugar exports and allowed the exports of the sweetener to the tune of 6 million Tons till May 2023. The decision was greeted with open hearts by the sugar exporters. As a result, the sugar millers, traders, and exporters have clinched deals of 1 million Tons within days of the approval.
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