MUMBAI: Sugar mills have contracted to export 4.3 million tonnes of sugar so far in the 2020-21 season ending on September 30, a trade body said on Wednesday, as a rally in global prices to a four-year high and an export subsidy makes overseas sales lucrative.
Higher exports from the world’s second biggest sugar producer could cap gains in global prices , which have been buoyed by lower production in Thailand, the world’s second biggest exporter.
The exports will help India reduce stockpiles and support local prices of the sweetener, crucial in ensuring millions of cane farmers get government-mandated prices.
“Around 4.3 million tonnes of export contracts have already been signed,” the Indian Sugar Mills Association (ISMA) said in a statement.
“This is a great achievement especially because these contracts have been signed in just 2-1/2 months, since the date the export quotas were allocated by the government on December 31, 2020,” it said.
Out of the total contracts, nearly 2.2 million tonnes of sugar has already been shipped, the ISMA said.
The South Asian country has approved a subsidy of Rs 5,833 ($80.38) a tonne for exports of 6 million tonnes in the current year.
India has been selling sugar mainly to Indonesia, Dubai, Afghanistan, Sri Lanka and African countries, said a Mumbai-based dealer with a global trading firm.
“A container shortage and higher freight charges are limiting Indian exports,” the dealer said.
Indian mills have produced 25.87 million tonnes of sugar in the current marketing year, nearly 20% more than a year ago as output jumped in Maharashtra and Karnataka, the ISMA said.
However, this year many mills are closing operations early due to limited supplies of sugar cane, the trade body said.
In the current marketing year, 502 sugar mills have started operations, but 171 mills stopped crushing by mid-March end, it said.