Despite the second wave of coronavirus infections, international sugar prices have been steadily increasing, owing to the crude oil prices.
India’s sugar exports have reached a new high due to increased demand from foreign markets. Contracts totaling 59 lakh tonne have been signed to date, with 43 lakh tonne already shipped out of the country.
According to Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Limited, the country could export more than its 60 lakh tonne quota, with some mills even exporting sugar without benefiting from government subsidies.
The central government announced a Rs 3,500 crore subsidy programme to ship out 60 lakh tonne of sugar at the start of the 2020-21 sugar season. Mills will receive this subsidy after completing their quota, with the goal of reducing the sugar surplus in the domestic market. The country will see a subsidy programme for sugar exports for the second year in a row to help the sector minimise inventory. This is the second year in a row that India will have a strong export performance. Around 59 lakh tonne of sugar was exported last year.
Despite the second wave of coronavirus infections, international sugar prices have been steadily increasing, owing to the crude oil prices. Brazil, the world’s leading sugar producer, had diverted a large portion of its cane crop to ethanol production, resulting in a reduction in sugar production. Many markets that had previously relied on Brazil for sugar have now switched to India.
The sugar industry has had a good year so far, with domestic sales remaining high. Sales have been strong, particularly from industrial buyers, despite previous predictions of low sales due to the Covid-19 lockdown in April.
The opening stock for the 2021-22 sugar season, which starts in October, will fall below 100 lakh tonne if the industry records 65 lakh tonne of exports. This will be a positive change for the industry after years of surplus stock, as ex-mill prices would be sufficient for mills to pay cane farmers on time.
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Hello, my name is Anuj Boruah. I am quite interested in writing about current events in business, finance, and the economy. I work as a newswriter at Reviewminute.
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