Now after banning the export of wheat and broken rice ban on export of sugar can be imposed. The central government can also ban the export of sugar soon. It is expected that this time sugar mills may be allowed to export up to 5 million tonnes of sugar from October. After this, further quantity will be reviewed in January-February keeping in view the domestic production and prices. On May 24, the central government shifted sugar exports from “free” to “restricted” category.
It capped total exports to 100 liters for the 2021-22 sugar year, which was increased to 112 liters with effect from August 1. According to the Indian Express, sources told that the government is worried about the production of sugarcane this time as Uttar Pradesh, the major sugarcane producing state, has received 43 per cent less monsoon rains. Apart from this, there have also been reports that due to fungal disease in many places, the sugarcane crop has been ruined.
Decrease in production in Uttar Pradesh
Currently, both production and exports from India touch a record level of 360 liters and 112 liters respectively in the 2021-22 sugar year. Sources said the lower production is likely to be offset by growth in Maharashtra, Karnataka and Tamil Nadu, which has received good rains and has filled reservoirs. This is still equivalent to two and a half months of consumption as well, but they don’t want to take any risk.
Export contracts can be signed
Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories, said allowing exports in installments makes sense, as it would enable mills to enter into contracts before resuming production for the new year. He said that the government has already told us that mills can sign export contracts for up to 15 per cent of their production. The strategy to regulate exports is also likely in 2022-23 after reviewing the domestic availability situation.
Sugar mills willing to export
Sources reveal that a notification allowing an initial volume of 50 liters is expected in the next few days. The second installment of 30-35 liters may come by February, when the production can also be properly estimated. Mills are keen to start exports early for two reasons. The first is that Brazil’s sugar season, the world’s largest exporter, is from April to November. It provides facilities for exports to Indian mills.
white sugar rate
The second reason could be its price, as white sugar for December delivery is currently being bid at around $538 a tonne. Deducting the cost of Rs 3,500 (for bagging, transportation from factory to port, stevedoring and handling) translates into an ex-mill price of Rs 35,500 per tonne. This is over and above the nearly Rs 34,000 that Maharashtra mills get from domestic sales of ‘S-grade’ sugar.
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