Giving major relief to sugar mills, the Indian government has decided to permit the export of 10 lakh metric tonnes (LMT) of sugar, although the official notification is yet to be released.
According to sources, the government made this decision considering that enough stock is available in the country.
Earlier, the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) had appealed to the government to allow the export of sugar during the ongoing season.
ISMA had stated that the export of sugar in the current season would not only ensure a comfortable stock for domestic consumption and sustain the Ethanol Blending Program (EBP) but also help maintain the financial liquidity of sugar mills, thereby facilitating timely payments to farmers.
Sugar exports were capped at around 11 million metric tonnes (MMT) in Sugar Season (SS) 21-22, approx 6 MMT in Sugar Season 22-23, and were not permitted in Sugar Season 23-24.
The industry is now waiting to see how the allocation will be made to the mills. However, raws are in disparity, whereas LQWs will be in parity till $445/450 per MT for West Maharashtra and North Karnataka mills. Currently, whites are trading about $478 per MT, but we’ll see how they respond once the official confirmation is released.
The decision will help millers financially and also assist in clearing cane dues on time. It is also likely to boost the domestic sugar price, which has already increased by Rs 200 per quintal from the recent lower levels following the export news. The market will remain bullish after the export decision, providing further relief to mills.
Ethanol blending is a government priority, and it is progressing smoothly. To ensure it remains on track, the government has reduced the price of FCI rice for distilleries producing ethanol to Rs 2,250 per quintal, which will help boost biofuel production.
In the ongoing Ethanol Supply Year (ESY) 2024-25, ethanol blending in petrol reached 18.2 percent in December, the highest to date.
Sugar stocks will also remain bullish following this news.
