Indian mills gear up to make raw sugar for export as global prices rally

Bajaj Hindusthan Sugar

17/08/2021 04:00

(Repeats Aug. 16 story with no change to text)
    * Strong demand for raw sugar as Brazil's output drops
    * Mills plan to make raws at the beginning of the season
    * Traders so far sign contracts to export 725,000 T 

    By Rajendra Jadhav
    MUMBAI, Aug 16 (Reuters) - Indian mills are planning to make
raw sugar at the beginning of the new marketing season starting
Oct. 1 as a rally in  global prices to 4-year highs boosts
demand for so-called raws from overseas, six industry officials
told Reuters.
    Indian mills traditionally produce white sugar for local
consumption and make small amounts of raw sugar for exports.
    But potential supply tightness in world markets in the
December quarter after drought and frosts hit the sugarcane crop
in top exporter Brazil prompted Indian mills to plan production
of raw sugar for overseas sale.
    "We are planning to start the season with raw sugar since it
is easier to export than white sugar. Prices are also attractive
and they are likely to remain firm," said B.B. Thombare,
president of the West Indian Sugar Mills Association.
    Exports from India could cap global prices  SBc1   LSUc1 
and help boost supplies in Asia as the world's biggest exporter
Brazil is likely to harvest a smaller crop than last year.
 urn:newsml:reuters.com:*:nL1N2PH1A5
    Mills have contracted to export around 725,000 tonnes of raw
sugar and 75,000 tonnes of white sugar for shipment in November
to January, dealers said.
    However, although many mills in the western state of
Maharashtra have decided to produce raw sugar for export they
are not selling it in advance on expectations that prices will
rise further overseas, said a Mumbai-based dealer with a global
trading firm.
    "Mills want to sell on the spot basis instead of signing
advance contracts," he said.
    Exporters are willing to buy raw sugar at around 32,000
rupees ($431) per tonne from mills, but producers are not ready
to sell, said Praful Vithalani, president of the All India Sugar
Trade Association (AISTA).
    India could export at least 6 million tonnes of sugar in
2021/22 compared with 7.1 million tonnes in the current year,
Vithalani said.
    Strong export demand has also lifted local sugar prices
 SUG-MMZR-NCX  by 10% since mid-July to the highest level in
nearly four years.

 (Reporting by Rajendra Jadhav; Editing by Emelia
Sithole-Matarise)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters
Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))