April 15 (Reuters) - India has sealed deals to export 1.4 million tonnes of sugar so far in the season that began in October but is likely to miss its target of selling 2 million tonnes on the world market, an industry body chief said on Tuesday.
Export deals have ground to a halt of late because of a sharp rise in local prices, after a long spell of free-fall, and unattractive global rates.
"In my view, our exports will be somewhere around 1.8 million tonnes, lower than our expectation of at least 2 million tonnes for this year. There have been no export deals in the last 15 days," Abinash Verma, director general of the Indian Sugar Mills Association (ISMA), told Reuters.
Mills have exported 800,000 tonnes of raws and 650,000 tonnes of whites since October.
India, the world's biggest sugar producer after Brazil, is bracing for another surplus output this season, the fourth straight year of production exceeding demand.
Higher output in the past few years led to a slump in prices that dropped below the cost of production, prompting mills to request the government to give incentives to boost exports and trim bulging stocks at home.
In February the government agreed to give 3,300 rupees ($54.79) a tonne subsidy for raw sugar production meant for exports.
India traditionally produces white sugar but a global glut made shipments of whites difficult. Instead, a rise in sugar refining capacity in Asia and Africa gave Indian mills an opportunity to export raws.
"The decision to give the incentive came too late and I do not see any large-scale export deals taking place now since we are in April," said Verma.
Although the sugar season runs from October to September, cane crushing begins to taper off by April. As a result, mills sign the bulk of their export deals before April by when overseas sales start winding down.
"Our prices were continuously falling for the last 14-16 months. The fall got more pronounced in the past 6 months but things are now slightly better," said Verma.
PRICES PICKING UP
Local sugar prices hit a 14-1/2 month high on April 4, thanks to the summer season when demand for ice creams and soft drinks picks up. The election campaign has also propped up prices.
"With prices finally looking attractive here in India, I believe any major export deal will happen only if global prices jump to 18.5 cents per pound," Verma said.
On Monday, benchmark prices in New York slipped to their weakest since late February due to renewed concerns on oversupply from Brail and Thailand.
Reuters analyst Wang Tao believes prices in New York could fall to 16.30 cents per lb, as it has broken below support of 16.68 cents.
Allaying fears that forecasts of the El Nino weather pattern could cut cane acreage, Verma said cane area is likely to remain at the previous year's level because the crop is largely grown on irrigated areas.
But yield could be hit if monsoon rains turn patchy, failing to replenish reservoirs.
India, also the world's biggest sugar consumer, is poised to produce 23.8 million tonnes of the sweetener in the 2013/14 season, lower than 25.1 million tonnes in the previous year but higher than annual demand of about 23 million tonnes.
On Oct. 1, 2013 when the current season began, the country had 8 million tonnes of carryover stocks from the previous season. ($1 = 60.23 rupees).
Source:- in.reuters.com
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