The country may be able to export at least 2 million tonnes under OGL.
India, the world’s second-biggest sugar producer, plans to review its export policy in January amid projections that output will top domestic demand for the first time in three years.
The government approved shipments of 500,000 metric tons for the year to September 30, Farm Minister Sharad Pawar told reporters in New Delhi yesterday. Procedures for sales outside the country will be completed in 10 days and a review of export plans will take place at the end of next month, Pawar said.
Rising supplies may help cool sugar prices that reached the highest level in almost 30 years last month in New York on concern that shipments from Brazil, the biggest producer, and India, may be too low to meet demand. Sales from India have been regulated after drought in 2009 damaged cane crops.
“We hope that more is allowed,” Vivek Saraogi, managing director of Balrampur Chini Ltd., India’s second-biggest mill, and the president of the Indian Sugar Mills Association (Isma) said in an interview. “Exports will help our cash flows and our ability to make payments to cane farmers.” Bajaj Hindusthan Ltd., the biggest sugar producer, and rivals gained in Mumbai on Thursday. Bajaj advanced as much as 5.1 per cent to Rs 113.5, while Balrampur, the second biggest, surged as much as 5 per cent to Rs 81.7, the highest level since December 6. Shree Renuka Sugars Ltd., the nation’s biggest refiner, jumped as much as 6.7 per cent to Rs 91.15.
Potential exports
The country may be able to export at least 2 million tonnes under the so-called open general-license plan and a further 1.4 million tonnes lying at ports and against earlier permits, Saraogi said on November 10, matching a forecast by the National Federation of Cooperative Sugar Factories Ltd.
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“The market expects India to increase the export limit,” said Jack Scoville, a vice president at Price Futures Group Inc. in Chicago. “We shall wait to hear how much the extent of increase will be next month.”
Raw-sugar for March fell as much as 0.6 per cent to 30.94 cents a pound on ICE Futures US in New York on Thursday, while white sugar for March delivery gained as much as 0.4 per cent to $770.80 a tonne in London.
India’s production may total 24.5 million tonnes, exceeding demand of 23 million tonnes, the government said last month. Isma and the National Federation forecast 25.5 million tonnes. Output may be 23.27 million tonnes, according to data from farmers interviewed by SGS SA for Bloomberg News. Production was 26.4 million tonnes in 2007-2008, the last time that output surpassed consumption, data from Isma show.
‘Quicker the Shipments’
“India can ship 500,000 tonnes in two to three months but it will depend on the modalities that are finalized,” said Yatin Wadhwana, managing director of Sucden India Pvt. “The simpler the modalities, the quicker the shipments will be.”
Sucden expects production of 25.8 million tonnes and exports of about 2 million to 3 million tonnes this marketing year, Wadhwana said last month.
The government will pay Rs 18.47 (41 cents) a kg to mills for supplying sugar to the government this year for onward sale to the poor, five per cent more than the Rs 15.57 last year, Pawar said. India’s sugar mills are required to sell 10 per cent of their production at below-market prices to the government for resale to the poor under the so-called levy quota. Mills can sell their remaining output at market rates.