With domestic sugar prices firming up, exports of the sweetener from India have almost come to a standstill. Ex-mill sugar prices that were hovering around R33 per kg over the past week improved to touch R36-R37 per kg in Maharashtra and R36.50-R37.50 per kg in Uttar Pradesh. International prices shoot up on Monday on forecasts of a cut in production in the coming season, but this is unlikely to improve exports, traders said.
According to the Bombay Sugar Merchants Association, 14-15 lakh tonne of sugar has been exported from India so far and chances of improvement in the situation are bleak this season. Mukesh Kuvedia, secretary general of the association, says that although international rates of the sweetener have improved to around $470 per tonne on Monday, traders are preferring the domestic market over overseas markets.
Over the past week, international prices have been on the lower side (around $330-$400 per tonne) and the start of the Brazilian sugar season was also expected to impact Indian export, he said.
The government was instrumental in persuading mills to agree to a target of 32 lakh tonne of sugar exports in 2015-16. With forecasts of lower output and higher local prices, the trader sentiment is that India may not be able to meet its export target. In addition, prices of raws have also touched 15 cents from 14.2 cents. However, with the season almost ending and very few mills are in a position to take up the production of raw sugar, which is usually factored in at the start of the season despite government subsidies, Kuvedia said.
Now the mills will have to wait for the next season which begins in October and then plan for raw sugar exports since this subsidy is allowed for the 2015-16 season, Kuvedia said.
Source :.financialexpress.com
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