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Mumbai, 15 May (Commoditiescontrol):The Indian government may not allow sugar prices to increase during the upcoming election year. Amid a bullish market scenario, the government is vigilant and likely to ban sugar exports as domestic prices have witnessed a steep rise recently. This rise is due to the global market supporting sugar prices as global surplus stocks have reduced to less than half.
The government may ban sugar exports because falling production raises further fears of a price hike due to a possible shortage. At the beginning of the 2022-23 sugar year (October-September), the government had fixed a quota of 6 million tonnes. However, the industry has contracted for a shipment of 6.1 MT. Therefore, it may apply a blanket ban on exports immediately, restricting shipments of around 85,000 tonnes that are yet to leave Indian ports. 6.02 million sugar already exported from India during the current season 2022-23 (October-September). Last year, sugar exports reached an all-time high of 11.2 MT and became the second-largest exporting country after Brazil.
According to sources, the government may issue a notification soon to ban the shipment. However, a Committee of Ministers (CoM), after reviewing the production of sugar in the country, its availability, and its price increase, had decided about it.
Government authorities have estimated India's sugar production in the year ending September at 32.7 MT, compared with 35.9 MT in the previous year. However, industry sources expect sugar output to lower by 200,000 tonnes than the government's projection. Sugar production dipped in Maharashtra and Karnataka; however, there was a slight increase in Uttar Pradesh's output. The annual consumption of sugar in the country is around 27.5 MT, so at the end of the current season, about 62 lakh tonnes of sugar stock will be available in the country, equal to the domestic requirement of about two and a half months.
The global market is also pushing sugar prices up. Industry sources plead that Indian sugar prices did not rise much compared to the international markets' lower availability of sugar, supporting market sentiments. As a result, the global sugar surplus may lower to 1.1 million tonnes in 2022/23 (Oct-Sept) year. In March, the surplus stock was estimated at 2.5 million tonnes. Lower yields in India, Mexico, and the European Union caused lower sugar production.
Sugar prices have witnessed a rise in recent months. Sugar prices (M30) were ruling at Rs. 3775-3850 per quintal in North India and Rs. 3680-3720 per quintal in Western parts of the country, including Maharashtra. Ex-mill prices have also risen significantly, with trade sources saying they have increased by 10-12% in the last two months. In the international market, the White sugar futures August 2023 contract was traded at USD 715.10 per MT in London, while ICE raw sugar was at US cents 26.26 per pound in New York.
(By Commoditiescontrol Bureau: 09820130172)
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