Prices of sugar in the international market have surged up on talks due to declining production in Brazil which is the world’s largest sugar supplier. Industry people said, this is likely to benefit sugar exports from India. In April, global sugar prices surged up by 20%. The production inBrazil is going to almost 7-8 million tonneswhich is less than last year while Thailand produced 7-8 million tonneswhich is less than its normal production.
The country’s sugar mills have so far traded close to 54 lakh tonnes and physical dispatches of around 40 lakh tonnes has been completed. Mr. Rahil Shaikh, vice president of All India Sugar Trade Association, said. “We expect theMaximum Admissible Export Quota(MAEQ) of 60 lakh tonnes which will be successfully completed earlier than expected while the deadline is September 2021”. Also, he said thatIf world market is above 19.00 cents/lb, India should be looking at exporting from OGL exports as it continues to be holding surplus sugar.
Abhijit Ghorpade, sugar exporter from Maharashtra said that if the global market rises due to the drought-like situation in Brazil, then India will get an opportunity to export under the Open General License(OGL). Indian white sugar which costed around Rs 2,600 per quintal on April 1, has now gone up to Rs 2,750 per quintal. On April 1, Indian raw sugar was trading at Rs 2,550 per quintal and has now gone up to Rs 2,700 per quintal.
The National Federation of Cooperative Sugar Factories (NFCSF) has demanded an increase in export quota, in international sugar market. “Due to the rise in crude prices, Brazil is expected to divert more cane towards Ethanol, and therefore, forward contracts have not happened, which has resulted in higher international prices. Prakash Naiknavare, MD of NFCSF, said. “The Indian sugar season is almost at an end and the sugar is freshly produced. Thailand has also reported a decline in sugar production and this augurs well for India,” he said.
The research institutes and sugar exporters have predicted that the growth of sugarcane in Brazil will be curbed by low soil moisture, which is favourable to the growth of sugarcane. Wilmar International said the extended drought could push Brazil’s sugarcane crush to 530 million tonnes this season, 12% less than last year and the lowest in ten years. In addition, the beet crop in France, European Union’s largest sugar producer, has suffered around 10% loss, which will reduce sugar production there as well, said the Farmers Group CGB.