Indian sugar mills clinch export deals within days of government approval -dealers

Bajaj Hindusthan Sugar

09/11/2022 10:40

By Rajendra Jadhav
       MUMBAI, Nov 9 (Reuters) - Indian sugar mills are
aggressively signing export deals, contracting for about 1
million tonnes just four days after New Delhi approved exports,
as they get higher prices for their product in global markets,
four dealers told Reuters.
    The quick shipments from the world's biggest producer of the
sweetener and its second biggest exporter, could weigh on global
prices  SBc1  LSUc1 , but help Indian mills in liquidating
stockpiles quickly and prop up domestic prices.
    "The industry was waiting for the government to announce the
policy," said a dealer with a global trading house based in
Mumbai, the financial capital.
    "As soon as the policy was announced, traders and millers
started signing export deals," added the dealer, who spoke on
condition of anonymity.
    India's approval came late on Saturday for the export of 6
million tonnes of sugar in the 2022/2023 marketing year that
started on Oct. 1. 
    After the announcement, mills have sealed deals to export
about 1 million tonnes of sugar, said Rahil Shaikh, the managing
director of exporter MEIR Commodities India.
    "Mills are getting a premium of 2,000 rupees to 3,000 rupees
per tonne from the overseas sale. So they are very interested in
exports," he added.
    India was selling white sugar at about $480 a tonne
free-on-board (FOB), a discount to London white sugar futures,
which were ruling above $534 on Wednesday, for shipments in
December to February, dealers said.
    Mills are likely to sell the entire allocated quota of 6
million tonnes before the end of December, and shipments could
stretch until the end of March, said the Mumbai-based dealer.
    India's sugar exports in 2021/2022 touched an all-time high
of more than 11 million tonnes, but most of those were from
mills in the western state of Maharashtra and neighbouring
Karnataka.
    Mills in northern Uttar Pradesh, the country's second
biggest producer of sugar, are also interested in exports this
year for the higher prices they fetch, said a New-Delhi based
dealer with an international trading firm.
    "This year everyone is interested in exports but the quota
is limited," he said.
    Producer body the Indian Sugar Mills Association (ISMA) 
expects that New Delhi could allocate a second tranche of 3
million tonnes for the exports on top of the 6 million tonnes
approved, it said in a statement.
 (Reporting by Rajendra Jadhav; Editing by Clarence Fernandez)
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