Indian sugar mills sign deals to export 2.7 million tonnes of sugar: AISTA


Indian sugar mills have contracted to export 2.7 million tonnes of sugar since the current season began on Oct. 1, trade body All India Sugar Trade Association (AISTA) said. Mills have already shipped out 1.7 million tonnes of the sweetener, a top official of the All India Sugar Trade Association told Reuters.

Indian mills have sold nearly an equal quantity of raw and refined, or white sugar, for which the top destinations are Bangladesh, Sri Lanka, Somalia, Iran and Sudan, the official said.

India, the world’s biggest sugar consumer, late last year approved incentives to encourage cash-strapped mills to export at least 5 million tonnes of sugar in the 2018-19 season to help prop up prices by trimming bulging stocks.

Meanwhile during the current season, Maharashtra’s sugar output is expected to fall to 8 million tonnes on dry weather. Sugar production in Maharashtra for the year starting Oct 1 may be eight million tonnes, down at least 25% from this year’s output, said a top official of Maharashtra State Co-operative Sugar Factories Federation Ltd.

That would be the least since 2016-17, when production almost halved. Maharashtra’s total production this year is likely to hover around 10.7 million tonnes.  The forecast comes as private Indian forecaster Skymet Weather Services Pvt. predicts a drier-than-normal monsoon this year.

India’s total sugar production, which reached a record 32.5 million tonnes in 2017-18, may drop to 31.5 million tonnes in the current year, and to 30 million tonnes in the year starting Oct 1 on dry weather and as more cane may be diverted to boost ethanol output, according to the National Federation of Cooperative Sugar Factories Ltd. According to the federation, sugar output could fall to 27-28 million tonnes in 2020-21.

The decline in production may offer relief for other producers such as Australia and Brazil, which have complained to the World Trade Organization that India’s gushing exports and subsidies are suppressing global prices. India’s June-September monsoon, which delivers more than 70 per cent of the country’s annual rainfall, is likely to be below normal this year as the El Nino weather pattern may impact rain, according to Skymet.

Shekhar Ghosh is a communications consultant and and former journalist, who has edited and written for publications such as like Business India, Business Standard, Business Today and Outlook.

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