India likely to keep lid on sugar exports as output dips- sources

Bajaj Hindusthan Sugar

20/01/2023 01:30

(Repeats from Thursday)
    By Rajendra Jadhav and Mayank Bhardwaj
       MUMBAI/NEW DELHI, Jan 19 (Reuters) - India is not
looking at allowing more sugar exports, government and industry
officials said on Thursday, dampening speculation that the
world's biggest producer of the sweetener would permit a second
tranche of overseas shipments.
    India, the world's biggest sugar exporter after Brazil,
exported a record 11 million tonnes in the previous season to
Sept. 30, 2022.
    But the government has allowed sugar mills to export only
6.1 million tonnes of the sweetener in the current season that
began on Oct. 1 2022. Food price inflation was high at the start
of the season, prompting curbs on exports.
    But the authorities had said they could take a view on a
second tranche of sugar exports after getting a clearer idea
about local production.
    Mills have already contracted to export about 5.6 million
tonnes, and producers, traders and industry officials were
expecting the government to allow an extra 2-4 million tonnes of
overseas shipments.
    But expectations of a drop in sugar output have dampened
prospects of any additional exports during the current 2022-23
season, government and industry officials said.
    Lower sugar exports from India could raise global prices
 SBc1 ,  LSUc1  and allow rivals Brazil and Thailand to increase
their shipments.
    "Sugar cane yields were far lower than last year. The
production is not sufficient to permit additional exports," said
an official with direct knowledge of the matter. He did not wish
to be named as he is not authorised to talk to the media.
    "It is not possible to fulfil the industry's demand of 3-4
million tonnes. We can't allow even additional exports of 1
million tonnes," said another official, who declined to be
named.
    Global trading houses were initially expecting that India
would allow 8 to 9 million tonnes of sugar in the current year
ending on Sept. 30, 2023. 
    But adverse weather surprised the industry. The country's
sugar production was initially projected to rise to a record
36.5 million tonnes, far above local demand of 27.5 million
tonnes.
    But now the production estimate has been cut to 34.3 million
tonnes. 
    Reuters was the first to report in December on the likely
drop in production.
        "We are getting divergent views on production. We will
get a far better idea about production in the next month or so,"
Food Secretary Sanjeev Chopra told reporters on Thursday.
    One industry official said there was a proposal to allocate
an additional export quota of around 400,000 tonnes to sugar
mills that are making ethanol directly from sugar cane juice.
    But even that proposal is unlikely to be approved before
end-February as the government would prefer to see actual
production numbers before making a decision.
    "The government may not be able to allow even small quantity
if production numbers continue to be revised lower," the
industry official said.
    India mainly exports sugar to Indonesia, Bangladesh,
Malaysia, Sudan, Somalia and United Arab Emirates.
 (Reporting by Rajendra Jadhav and Mayank Bhardwaj. Editing by
Jane Merriman)
 ((mayank.bhardwaj@thomsonreuters.com; +91-11-4954 8030;
Twitter: @MayankBhardwaj9; https://twitter.com/Rajendra1857))