India is likely to impose a ceiling on sugar exports for a second straight 12 months beginning this October, aiming to guarantee ample home provides and preserve a lid on native costs, business and authorities sources mentioned 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 full to be shipped out within the present season, business and authorities sources mentioned. They requested not to be named as they weren’t authorised to communicate 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 elevate benchmark white sugar costs, that are already buying and selling close to 5-1/2 12 months highs, merchants mentioned.
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 reminiscent of 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 12 months 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 produce ethanol for mixing into gasoline.
Brazil’s sugar manufacturing is about to rebound throughout the present season, however with restricted exports from India, merchants don’t anticipate costs to come down they usually as an alternative might go increased.
“There is a necessity to regulate exports to keep away from any sort of panic out there,” mentioned a senior authorities official with information of the matter. While the sources anticipated next season’s export cap to be set between 6 million and seven million tonnes, the precise amount shall be fastened close to the beginning of the 2022/23 season, they mentioned.
The authorities will have 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, have been 60% under common for the reason that begin of the wet season on June 1, in accordance to 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 6.5 million tonnes on Oct. 1, when the next 2022/23 season begins, versus 8.2 million tonnes a 12 months earlier, business and authorities estimates present.
Aditya Jhunjhunwala, president of the Indian Sugar Mills Association, a producers’ physique, has requested that the federal government enable mills to export 8 million tonnes of sugar next 12 months, as output might exceed this 12 months’s document 36 million tonnes, in accordance to 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 choice on next 12 months’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.
(Reporting by Rajendra Jadhav and Mayank Bhardwaj; Editing by Gavin Maguire and Edmund Klamann)
(This story has not been edited by Business Standard workers and is auto-generated from a syndicated feed.)