Indian sugar exports slow as global prices correct, rupee firms

E I D-Parry (India)

11/01/2022 11:37

* Mills pause after signing deals to export 4 mln T-dealers
    * Diversion of sugar for ethanol reduces stockpiles-dealers
    * Global prices need to rise to make exports viable- dealers

    By Rajendra Jadhav
    MUMBAI, Jan 11 (Reuters) - Indian mills are holding off on
signing new sugar export contracts as falling global prices and
a strengthening rupee have widened the gap between local and
global rates, industry officials told Reuters.
    Lower shipments from the world's No. 2 sugar producer could
support global prices  SBc1   LSUc1  that fell to their lowest
in 5-1/2 months on Monday but could also prompt Indian mills to
divert more sugar for ethanol production.
    "At current price level exports are not viable from India.
Mills are getting much higher prices in the local market," said
Ravi Gupta, chairman of export committee at All India Sugar
Traders Association (AISTA).
    In the local market mills were selling sugar at 32,000
rupees to 35,000 rupees per tonne compared to around 30,000
rupees offered for overseas shipments, dealers said.
    Mills aggressively sold sugar when international prices were
around 20 cents per lb, said Rahil Shaikh, managing director
of MEIR Commodities India.
    Stockpiles have come down to comfortable levels and there is
no pressure on mills to sign new deals, Shaikh said.
    Indian mills have so far signed contracts to export 4
million tonnes of sugar in 2021/22 marketing year ending on
Sept. 30, dealers estimate. The country exported a record 7.2
million tonnes of sugar in 2020/21, taking advantage of the
government subsidy for overseas sales.
    "Surplus has gone down because of last year's record exports
and continuous diversion of sugar for ethanol," said B.B.
Thombare, president of the West Indian Sugar Mills Association.
    New Delhi has raised the price at which oil marketing
companies will buy ethanol from sugar mills, making production
of the biofuel lucrative.  urn:newsml:reuters.com:*:nD8N2MP020
    Most of the sugar exports contracts were signed by mills in
western state of Maharashtra and neighbouring Karnataka, but
mills in top producing Uttar Pradesh were holding off because of
higher local prices, said Gupta of AISTA.
    "Mills are focusing on executing signed contracts rather
than singing new deals. If international prices come closer to
Indian prices, then only mills will come forward," said a
Mumbai-based dealer with a global trading house, adding the
country could export 6 million tonnes in the current season.

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