With an eye on a nearly 25 per cent higher realisation from export and a downward revision in Brazilian sugar output, Indian sugar millers are pushing for allowing export of another million tonnes of the sweetener by October.
Indian Sugar Mills Association (Isma), in a letter to the food ministry on Friday, made a case for allowing export of one million tonnes over and above the million tonnes allowed by the government earlier this year.
Sugar mills are realising Rs 600-700 per quintal more on exports compared to the domestic realisation of around Rs 2,600 for Maharashtra mills and Rs 2,900 per qtl for mills in Uttar Pradesh.
Of the permitted export quantity of a million tonnes, domestic millers have already shipped around 700,000 tonnes. The country has also exported 1.1 mt under the advance licence scheme. In April, the government first allowed export of around 500,000 tonnes and a similar quantity was allowed again in June.
Sugar output projection in the world’s biggest producing nation, Brazil, has been revised downwards by 6.4 per cent since March on account of crop damage and dry weather. Against a projection of 34.59 mt in March, Brazil is now expected to produce 32.38 mt sugar, thereby creating a gap of 2.21 mt in the global market. International sugar prices have been on a roll since then, with sugar futures gaining around 50 per cent since early May.
India is the second biggest producing nation and Isma, the apex body for private sugar mills, says our surplus stock means India can take advantage of the lower Brazilian output.
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“India can fill the world sugar market gap. With the availability of 29.4 mt in the current October-September season and estimated consumption and export of 21 and 2.1 mt, respectively, we will be left with an opening stock of about 6.3 mt as on October 1,” said Abinash Verma, director general, Isma.
Verma pointed out that the stock of 6.3 mt is high, considering the average consumption in October-December for the past four years has not been more than 5.4 mt. And, in spite of the opening of sugar exports, retail prices have not increased.
According to the department of consumer affairs, the retail sugar price in Delhi is now Rs 32.50 per kg, compared to Rs 33 six months earlier.
The industry is anticipating another bumper crop in the new season beginning October. Sugar output in the current season is projected at about 24.2 mt.