Sugar rally could help India to export 6 mln T without subsidy

DWARIKESH SUGAR INDUSTRIES

18/08/2021 09:14

By Rajendra Jadhav and Mayank Bhardwaj
    MUMBAI/NEW DELHI, Aug 18 (Reuters) - India could export 6
million tonnes of sugar in the new season starting in October
even without government subsidies, with global prices making
overseas sales more lucrative after rising to their highest in
4-1/2 years, industry officials said.
    New Delhi is expected to withdraw sugar export subsidies
from the new season as a sharp rise in prices makes it easier
for Indian mills to sell on the world market, the most senior
civil servant at the Ministry of Consumer Affairs, Food and
Public Distribution told Reuters on Tuesday.  urn:newsml:reuters.com:*:nL1N2PN15T
    "Even without the subsidy, India could export 6 million
tonnes of sugar provided the market remains stable above 20
cents per lb," said B.B. Thombare, president of the West Indian
Sugar Mills Association.
    On Tuesday benchmark raw sugar prices in New York  SBc1  hit
a 4-1/2-year high of 20.37 cents, supported by fund buying
against a backdrop of tightening supplies.  SOF/L 
    Exports from the world's second-biggest sugar producer could
cap the rally in global prices  LSUc1  and help to boost
supplies in Asia and Africa while Brazil, the world's biggest
exporter, expects to harvest a smaller crop than last year owing
to drought and frosts.  urn:newsml:reuters.com:*:nL1N2PH1A5
    Shares in Indian sugar producers fell by up to 5% after
Reuters reported that India might withdraw sugar export
subsidies.  urn:newsml:reuters.com:*:nL4N2PP16H
    "Every month traders are slashing production estimates for
Brazil. It seems supply would be limited in the world market
during November to March and someone must fill in. India could
do it as it has ample stocks," said one Mumbai-based dealer at a
global trading company.
    Brazil's 2021/22 center-south (CS) sugar production is
forecast to fall to 32.5 million tonnes from a June forecast of
34.1 million tonnes, according to food trader Czarnikow.
 urn:newsml:reuters.com:*:nS0N2KS01D
    Cashing in on rising sugar prices, Indian traders have, for
the first time, signed contracts a few months ahead of shipments
to export about 725,000 tonnes of raw sugar and 75,000 tonnes of
white sugar.  urn:newsml:reuters.com:*:nL4N2P5246

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