Sugar mills in the country plan to boost raw sweetener exports to benefit from a surge in demand from refiners before supplies from Brazil starting next month widen a global glut.
The country, which has permitted mills to ship two million tonnes of raw and refined sweetener since the start of the crop year on October 1, could ship an extra two million tonnes, according to the National Federation of Cooperative Sugar Factories Ltd. Mills need export permits at the latest next month to plan production, managing director Vinay Kumar said by phone.
“There is higher demand for raw sugar in the international market because refineries worldwide are looking for supplies,” said Abinash Verma, director general of the Indian Sugar Mills Association. The country can boost raw sugar sales to the Middle East, Indonesia and East Africa because of lower shipping costs, he said.
Sugar output in Brazil’s Center South, the world’s largest producing region, will rise to the highest in two years as crops recover from damage caused by bad weather, according to researcher Datagro Ltd. Production is estimated at 33.8 million tons for the crop year that starts April 1 from 31.2 million tons, Plinio Nastari, Datagro’s president said March 15.
Missing Opportunity
“We will miss the opportunity in exporting more raw sugar if the government delays approvals,” Kumar said. “Mills will decide on increasing their raw sugar production depending on the government policy.”
A panel of ministers will decide on additional exports by the first week of April, the government official told reporters in New Delhi on March 14, asking not to be identified citing government policy.
Raw sugar for May delivery advanced 1 percent to close at 25.66 cents a pound on ICE Futures U.S. in New York yesterday, while white sugar for May delivery rose 0.2 percent to $668 a ton on NYSE Liffe in London.
Mills have shipped 360,000 tons of raw sugar this season, about a third of total exports of 1.06 million tons, he said.
Sugar output in India, which is exporting the sweetener for a second year, climbed 14 percent to 21.2 million tons between Oct. 1 and March 15, the Indian Sugar Mills Association said yesterday. The harvest may total 26 million tons in the year ending Sept. 30 and the surplus for exports may be as much as 2.5 million tons, it said.
Mills owed farmers 50.9 billion rupees ($1.01 billion) as cane arrears as of Dec. 31, Kumar said.
“The government should allow more exports immediately, which will check the increase in cane arrears,” Kumar said. “This may lower cane planting if arrears are not checked.”
