India to Become The Major Role of World Sugar Export Hub

International Sugar Organization (ISO) is promoting India as an export hub for neighbouring countries such as Iran, Bangladesh or Myanmar to import since the world sugar market moving into deficit for the current season. This furtherance will help improve the sugar world markets including India gorvernment is trying to maximise sugar exports.

Jose Orives, executive director of ISO, told The Indian Express that the move was to “re-energise the world sugar stocks and to improve global sugar prices”. speaking at the second International Conference organised by Pune-based Vasantdada Sugar Institute, pointed out a 5.5 million tonnes (mlt) shortfall in global sugar production this season. “As against the consumption forecast of 176.5 mlt, the season’s production estimates stand at 170.4 mlt,” he said. This would be the first deficit year after two back-to-back surplus seasons in 2017-18 and 2018-19.

According to ISO predictions, sugar exports for 2019-20 season would be around 58.5 mlt, much lower than the record 66.32 mlt reported in 2015-16. India with 8-10 mlt of stock has the largest surplus and so the ISO was promoting the country as export destination for neighbouring countries like Iran, Bangladesh and Myanmar. “While this will help re-energise the sugar stocks in the country, it will also help improve the world markets by evenly distributing supplies,” Orives said, adding that India’s stocks was acting as a dampener for prices.

Government of India has allowed export of 6 million tonnes of sugar during 2019-20 under Maximum Admissible Export Quota (MAEQ) to help deal with the surplus sugar stocks in the country. After the first quarter of the sugar season that started October 1, sugar millers from Uttar Pradesh, the largest sugar producing state of the country have contracted for export of about 70% to 80% of the quota allocated to the state. Whereas, their counterparts in Maharashtra have contracted for barely about 25 % of the state’s cumulative export quota.

Vivek Pittie, president, Indian Sugar Mills Association (ISMA) and director, Harinagar Sugar Mills from Bihar said, “Many sugar mills from north India may be open to getting more export quota. My own mills has contracted 95% of the export quota and would like to export more sugar because our inventories are high. There is problem of storage and we will like to liquidate the stocks as fast as possible. The quality of the sugar deteriorate we store it for longer period and later have to sell it at a discount.”

Brazil, the largest sugar producer in the world, had maximised its ethanol production and removed 10 mlt of sugar from the market. For the current season — mills in Brazil started their operations in April — the international prices of sugar and of oil will dictate how much cane is diverted for production of the fuel additive. If raw sugar prices breach the 15 cent/lb mark, Orives said Brazil might choose to produce more sugar than ethanol

Exports from India have picked up steadily, with the country reporting signing of contracts for shipping out of around 2.8 mlt of the sweetener. Majority of this has been cornered by the mills in Uttar Pradesh. The ISO has initiated communications with various governments to correct misconceptions about sugar consumption. A gradual slowdown in sugar consumption was a concern for the sector. Regions such as western and central Europe have been reporting a negative growth in terms of sugar consumption, with governments resorting to sugar tax to control consumption.

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