Indian sugar mills have signed contracts to export 600,000 metric tons of sugar in the 2024/25 marketing year, which ends in September. However, they are hesitant to finalise additional export deals due to rising domestic prices, according to five industry officials, reports The Economic Times.
India, the world’s second-largest sugar producer, has seen a slowdown in exports, a trend that could support global sugar prices. Currently, global prices are hovering near their lowest levels in three years.
After suspending exports last year to stabilize local prices, India permitted the export of 1 million tons of sugar in January. The move aimed to help mills sell surplus stock. However, with domestic sugar prices climbing and expected to rise further due to lower production and increased summer demand, exports have slowed this month after a brief pick-up in the previous month, said a Mumbai-based dealer working with a global trading firm.
All sources spoke anonymously as they were not authorized to speak to the media.
India’s sugar output for the 2024/25 season is estimated to drop to 25.8 million tons, while annual consumption is around 29 million tons. The demand for sugar typically rises between mid-March and mid-June as more cold drinks and ice cream are consumed during the summer months.
Mills have already shipped about 250,000 tons of the 600,000 tons contracted since January, according to a New Delhi-based dealer.
Meanwhile, domestic sugar prices are nearly $20 per ton higher than London futures, making it more attractive for buyers to source better-quality Brazilian sugar at a similar price, another Mumbai-based dealer from a trade house explained.
India has traditionally exported sugar to countries including Afghanistan, Bangladesh, Indonesia, Sri Lanka, and the United Arab Emirates. Between 2018 and 2023, India was the world’s second-largest sugar exporter, averaging 6.8 million tons annually.
Despite the slowdown, Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd., remains confident that mills will be able to export the full 1 million-ton quota.
Mills have ample time to make exports happen. They can sell sugar anytime at a favorable price until the end of September,” Naiknavare said.
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