India could restrict sugar exports to 10 mln T -govt source (updated)

Dhampur Sugar Mills

24/05/2022 10:41

* India started planning to curb sugar exports in March
    * After higher output f'cast, India allowed some more
exports
    * Traders say exports of 10 mln T to help industry,
government

 (Adds details, quotes)
    NEW DELHI/MUMBAI, May 24 (Reuters) - India plans to restrict
sugar exports for the first time in six years to prevent a surge
in domestic prices, potentially capping  this season's exports
at 10 million tonnes, a government source told Reuters on
Tuesday.
    India is the world's biggest sugar producer and the second
biggest exporter behind Brazil.
    Reuters in March reported that India was planning to curb
sugar exports to keep a lid on local prices and ensure steady
supplies in the domestic market.  urn:newsml:reuters.com:*:nL2N2VS0AU
    Lower sugar output in Brazil and high oil prices which
encourage mills there to produce more sugarcane-based ethanol
have spurred global price gains.
    Initially, India planned to cap sugar exports at 8 million
tonnes, but the government later decided to allow mills to sell
some more sugar on the world market as production estimates were
revised upwards.
    The Indian Sugar Mills Association, a producers' body,
revised its output forecast to 35.5 million tonnes, up from its
previous estimate of 31 million tonnes.
    Indian mills have so far signed contracts to export 8.5
million tonnes of sugar in the current 2021/22 marketing year
without government subsidies. Out of the contracted 8.5 million
tonnes, mills have already dispatched around 7.1 million tonnes
of the sweetener.  L3N2XB1CM 
    Shares in leading sugar mills such as Balrampur Chini
 BACH.NS , Dalmia Bharat Sugar  DLMI.NS , Dhampur Sugar Mills
 DAMS.NS , Dwarikesh Sugar Industries  DWAR.NS  and Shree Renuka
Sugars  SRES.NS  fell as much as 8% on Tuesday.
    Traders, however, said the decision to allow mills to export
10 million tonnes would help the country sell a reasonably big
quantity of sugar on the world market.
    "The limit of 10 million tonnes is fairly big, and both
mills and the government will be happy with this," said a
Mumbai-based dealer with a global trading firm. He didn't wish
to be named in line with his company's policy.
    After exporting 10 million tonnes, India's sugar stocks on
Oct. 1, when the next 2022-23 season begins, would total 6
million tonnes, sufficient to cater to the country's festival
season demand during the December quarter, the dealer said.

 (Reporting by Mayank Bhardwaj and Rajendra Jadhav
Editing by David Goodman and Susan Fenton)
 ((rajendra.jadhav@thomsonreuters.com; +91-22-68414378 ; Reuters
Messaging: rajendra.jadhav.thomsonreuters.com@reuters.net))