A week after the government of India announced the sugar export subsidy policy for the ongoing season, sugar mills from Uttar Pradesh (UP) have signed export contracts for over six lakh tonnes of raw and white sugar. In contrast, mills from Maharashtra are yet to sign a single contract, according to a Financial Express report.
The Western India Sugar Mills Association (WISMA) has written to the Centre to issue the sugar export notification and mill-wise allocation of maximum admissible export quantity (MAEQ) at the earliest so that exports gather momentum and maximum quantity is exported before the arrival of Brazilian sugar in the market.
According to traders, the export contracts have been signed at Rs 2,400 to Rs 2,420 per quintal. Many factories in UP have entered into export agreements on the assumption that they would receive the same quota as last year. Of the allotted 60 lakh tonnes of sugar, UP’s share normally comes up to 20 lakh tonnes, while Maharashtra’s share comes up to 16 lakh tonnes. Last season, Maharashtra’s export quota was around 16.80 lakh tonnes.
While the ex-mill rates are around Rs 2,700-Rs 2,800 per quintal, some brokers and traders are purchasing sugar at Rs 2,500-Rs 2,600 per quintal. This is happening despite prices remaining stable in the international market at $389-400 a tonne. Currently, raw sugar is quoted at 14.63 cents a pound in New York.
According to industry sources, almost all mills in Solapur have resorted to underselling. Around 50 per cent of the mills in Ahmednagar and Marathwada have been selling sugar below the government notified Rs 3,100 per quintal.