Indian sugar prices could remain firm despite curbs on exports- trade

DWARIKESH SUGAR INDUSTRIES

26/05/2022 10:02

By Rajendra Jadhav
    MUMBAI, May 26 (Reuters) - India sugar prices are likely to
remain firm despite New Delhi's move to cap exports as
stockpiles are set to fall to the lowest level in five years
amid record shipments and robust local demand, industry
officials told Reuters.
    Higher local prices will keep margins intact of sugar makers
such as Balrampur Chini  BACH.NS , Shree Renuka Sugars
 SRES.NS , Dalmia Bharat Sugar  DLMI.NS  and Dwarikesh Sugar
 DWAR.NS  and help them in making cane payments on time to
farmers.
    India on Tuesday imposed restrictions on sugar exports for
the first time in six years by capping this season's shipments
at a record 10 million tonnes, up from last year's 7.2 million
tonnes.  urn:newsml:reuters.com:*:nL2N2XH06I
    Sugar prices are unlikely to drop because of the curbs as
stockpile has depleted due to robust domestic demand and record
exports, said Ashok Jain, president of the Bombay Sugar
Merchants Association.
    The government estimates opening sugar stocks at the
beginning of the new marketing year on Oct. 1 could fall to 6.2
million tonnes, which would be the lowest in five years.
    Sugar prices in Mumbai  SUG-MMZR-NCX  eased only 0.3% since
the government announced the curbs.
    "Mills are not under supply pressure. This year consumption
has gone up due to robust demand from ice-cream and cold drink
makers," Jain said.
    Consumption of cold drinks and ice cream, and as a result
demand for sugar, rises in India during the summer months that
run roughly from March to June.
    This year, ice cream sales surged because of the heatwave,
according to the Indian Ice Cream Manufacturers Association.
 urn:newsml:reuters.com:*:nL2N2X80EQ
    India's sugar consumption in 2021/22 marketing year ending
on Sept. 30 could jump 5% from to a record 27.8 million tonnes,
government estimates.
    During festivals in December quarter, sugar prices could
move higher if the country receives lower-than-normal monsoon
rains, said a trader based at Kolhapur in the western state of
Maharashtra.

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