India is more likely to impose a ceiling on sugar exports for a second straight yr beginning this October, aiming to make sure ample home provides and hold a lid on native costs, business and authorities sources stated on Friday.
India, the world’s largest sugar producer, might cap exports of the sweetener at 6 million to 7 million tonnes within the 2022/23 October-September season, about one-third lower than the whole to be shipped out within the present season, business and authorities sources stated. They requested to not be named as they weren’t authorised to talk to media.
A authorities spokesperson didn’t instantly reply to a request for remark.
The curbs on exports by India, additionally the world’s second-biggest sugar exporter, might additional raise benchmark white sugar costs, that are already buying and selling close to 5-1/2 yr highs, merchants stated.
Benchamrk July uncooked sugar rose 1.88% to 18.93 cents per lb and August white sugar jumped 1.77% to $568.70 a tonne after the Reuters report.
Meanwhile, shares in main sugar producers akin to Shree Renuka Sugars, Bajaj Hindustan Sugar and E I D-Parry (India) Ltd fell between 2% and 6%.
Among components underpinning international sugar costs this yr are decrease sugar output in Brazil, a number one producer and the largest exporter, and crude oil costs at multi-year highs. Higher crude oil costs encourage sugar mills to divert extra cane to provide ethanol for mixing into gasoline.
Brazil’s sugar manufacturing is ready to rebound throughout the present season, however with restricted exports from India, merchants don’t anticipate costs to come back down and so they as an alternative might go increased.
“There is a need to regulate exports to avoid any kind of panic in the market,” stated a senior authorities official with information of the matter.
While the sources anticipated subsequent season’s export cap to be set between 6 million and seven million tonnes, the precise amount can be mounted close to the beginning of the 2022/23 season, they stated.
The authorities will take a look at the efficiency of the monsoon earlier than fixing the quota, they added.
Monsoon rains in sugarcane rising areas of the western India state of Maharashtra, the largest producer within the nation, had been 60% under common because the begin of the wet season on June 1, in keeping with climate workplace knowledge.
New Delhi on May 24 imposed restrictions on sugar exports for the primary time in six years with a cap for this season of 10 million tonnes.
Record exports within the present season might convey down inventories to six.5 million tonnes on Oct. 1, when the subsequent 2022/23 season begins, versus 8.2 million tonnes a yr earlier, business and authorities estimates present.
Aditya Jhunjhunwala, president of the Indian Sugar Mills Association, a producers’ physique, has requested that the federal government permit mills to export 8 million tonnes of sugar subsequent yr, as output might exceed this yr’s file 36 million tonnes, in keeping with a letter seen by Reuters. The affiliation didn’t instantly reply to a request for remark.
The letter additionally urged the federal government for an early resolution on subsequent yr’s export quota to assist mills money in on agency international costs.
India primarily exports to Indonesia, Bangladesh, Sudan, the United Arab Emirates, Nepal and China.
Source: www.financialexpress.com”