Oct 26, 2020
Even after 20 days into the new sugar year, which started on October 1, India hasn’t signed export contracts as there is no clarity about the export subsidy that was extended in the past two years. And Indian exporters as well as buyers in the global sugar market are keenly awaiting India’s export policy announcement. Though some exporters think that even without the subsidy the global prices can support Indian exports and help push raw sugar sales.
The announcement of the new policy has been delayed due to the state assembly elections in Bihar as the state has a few sugar mills. The announcement of any policy decision may not fit into the code of conduct.
India is expecting 31 million tonnes of sugar production in the 2020-21 season, with expectations of an additional increase in sugarcane planting for the 2021-22 season due to excess rainfall, amidst this, there is agreement among all stakeholders that exports need to be continued.
India has been giving incentives for sugar exports as the country has been regularly producing excess sugar for several years. In October 2019, millers had signed contracts for export of about 800,000 tonnes of sugar as the government had announced the continuation of export. Of the 6 million tonnes of quota given for export by the government, the industry exported 5.9 million tonnes of sugar in 2019-20.
According to the Indian Sugar Mills Association, they expect much higher production in the 2020-21 sugar seasons. India will need to continue to export about 60 lakh tonnes of the surplus sugar out of the country. They are we are waiting for the export policy and incentives will be necessary to make exports feasible.
According to a section of traders, even if incentives are not declared, international prices may increase, making exports feasible, said a section of traders. Overseas buyers contract in the month of October and November for raw sugar and the millers too need to make preparations for the production of raw sugar. The government should declare its export policy, either with a subsidy or without subsidy, so that the millers can grab the present opportunity available for the export of sugar.