Global sugar market waiting for India’s stand on 2020-21 export subsidy

PUNE: Indian exporters as well as buyers in the global sugar market are keenly awaiting India’s export policy announcement, said traders. Even after 20 days into the new sugar year, which started on October 1, India hasn’t signed export contracts as there is no clarity about the export subsidy that was extended in the past two years, they said.

Some exporters, however, said that even without the subsidy the global prices can support Indian exports and help push raw sugar sales.

India has been giving incentives for sugar exports as the country has been consistently producing excess sugar for several years. In October 2019, millers had signed contracts for export of about 800,000 tonnes of sugar as the government had announced the continuation of export. Of the 6 million tonnes of quota given for export by the government, the industry exported 5.9 million tonnes of sugar in 2019-20.

As the country is expecting 31 million tonnes of sugar production in the 2020-21 season, with expectations of a further increase in sugarcane planting for 2021-22 season due to excess rainfall, there is agreement among all stakeholders that exports need to be continued.

The Indian Sugar Mills Association said in a statement this week, “We expect much higher production in the 2020-21 sugar season. India will need to continue to export about 60 lakh tonnes of the surplus sugar out of the country.”

Mumbai-based sugar trader Praful Vithalani said, “This year, India has not been able to sign any contracts for export of sugar. We are waiting for the export policy and incentives will be necessary to make exports feasible.”

Sources in the trade said that the announcement ofctgr new policy has been delayed due to the state assembly elections in Bihar as the state has a few sugar mills. Announcement of any policy decision may not fit into the code of conduct.

Even if incentives are not declared, international prices may increase, making exports feasible, said a section of traders. “Overseas buyers contract in the month of October and November for raw sugar and the millers too need to make preparations for production of raw sugar. The government should declare its export policy, either with subsidy or without subsidy, so that the millers can grab the present opportunity available for export of sugar,” said Abhijit Ghorparde, a Maharashtra-based sugar broker.

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