Pressmediaofindia
Related Articles
22-01-2025
Bureau Report
NEW DELHI/ MUMBAI: India on Monday allowed exports of 1 million metric tons of sugar during the current season to September 2025 to help mills of the world’s second biggest producer export surplus stocks and help prop up local prices.
The decision could put further downward pressure on global prices which fell more than 1% on Monday.
The government has approved an export quota to strengthen the sugar sector by providing price stability and supporting 50 million cane growers, the Food Minister Pralhad Joshi said.
Media reported on Sunday that New Delhi was set to allow the exports to support local sugar prices that had come under pressure in recent months.
The Food Ministry has allocated mills a uniform export quota of 3.174% of their three-year average production, which they can export directly or via merchant exporters.
Exports help sugar mills generate crucial revenue, ensuring timely cane payments to farmers, said Deepak Ballani, director general at the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).
Although there had been speculation for weeks that exports would be allowed, the decision surprised some traders as this season’s production is expected to fall below consumption for the first time in eight years.
Production could fall to around 27 million tons from 32 million tons last year and below annual consumption of more than 29 million tons, according to leading trade houses. India, which sells sugar to Indonesia, Bangladesh and the United Arab Emirates among others, was the world’s No. 2 exporter during the five years to 2022-23, with volumes averaging 6.8 million tons annually.
It did not allow exports in the 2023-24 marketing year.
India’s re-entry to the global market sets the stage for significantly higher exports in the next marketing year, beginning in October, said Vishal Nirani, director at Nirani Sugars.
Earlier, India is set to allow exports of 1 million metric tons of sugar during the current season, government and industry sources said, to help mills export surplus stocks from the world’s second biggest producer of the sweetener and help prop up local prices. The permission to let mills sell 1 million tons of sugar on the world market could put further downward pressure on global sugar prices.
The government is expected to soon issue an official order allowing exports of 1 million tons of sugar, said the sources who did not wish to be named as they were not authorized to speak to the media.
The decision to allow exports, which had been speculated for the past few weeks, comes as a surprise to a section of traders, as this year’s production is expected to fall below consumption for the first time in eight years.
Maharashtra, Karnataka, and Uttar Pradesh account for more than 80% of the country’s total sugar production, with lower cane yields in these states prompting trade houses to reduce their output estimates for the current 2024-25 season.
The production could fall to around 27 million tons from last year’s 32 million tons and below annual consumption of more than 29 million tons, according to leading trade houses.
India, whose sugar export markets include Indonesia, Bangladesh and the United Arab Emirates, was the world’s No. 2 exporter during the five years to 2022-23, with volumes averaging 6.8 million tons annually.
India did not allow exports in the 2023-24 marketing year.
