India’s sugar mills need to export 6 to 7 million tonnes of sugar without govt subsidies.
As per the government official information, India’s mills need to export 6 to 7 million tonnes of sugar without any government subsidies in 2021-2022 to reduce inventories and to ensure the domestic prices remain firm amidst surplus production.
Sugar exports by the world’s second-largest producer could limit global prices, which have reached a four-and-a-half-year high this month on expectations that supplies from top producer Brazil will be reduced due to drought and frosts.
‘Sugar mills should take advantage of higher international prices and export as much as possible,’ said Subodh Kumar Singh, joint secretary at the Department of Food and Public Distribution, during a webinar on Tuesday.
After exporting a record 7.2 million tonnes of sugar the previous season, Indian mills have signed contracts to export 1.8 million tonnes in the 2021/2022 marketing year, which begins on Oct. 1, he added.
Afghanistan and Sri Lanka were among the key buyers, but demand from both has been restricted by local factors, and mills must look for new markets outside of Brazil, according to Singh.
Because the government is not providing a subsidy, global raw sugar prices must rise above 20 cents per pound to ensure India exports 5 to 6 million tonnes this year, according to Marex Spectron analyst Robin Shaw. New Delhi has ended an export subsidy that had been in place for the previous three years.