More Stories

Informist, Wednesday, May 7, 2025

 

By Taniva Singha Roy

 

MUMBAI – Sugar exports from India for 2024-25 (Oct-Sept) are seen around 700,000 tonnes as mills are quoting prices at a premium to benchmark London Futures prices, said G.K. Sood, chairman and non-executive director, MEIR Commodities. The government is expecting exports to be around 800,000 tonnes, he said.

 

In a move likely to ease the financial pressure on sugar millers, in January, the government officially approved the export of 1.0 million tonnes of sugar, to be shipped by September. The approval was given to provide a much-needed relief to sugar millers who claimed to have been grappling with financial instability. The government had in June 2022 restricted exports of sugar owing to concerns over domestic availability.

 

However, Indian sugar is not competitive in the global market as millers are quoting higher prices for exports than the benchmark prices. "Indian sugar quoted on the London benchmark and Indian sugar being of lower quality should be priced lower than the benchmark. Hence, there is weak demand for Indian sugar as they are buying at a cheaper rate from European countries," Sood said.

 

Against the approved quantity of 1 million tonnes, mills have so far exported 400,000 tonnes of sugar. 

 

When government had allowed exports, price of domestic sugar was around INR 3,800 per 100 kg, but millers were quoting INR 4,500 for exports. However, buyers were only willing to purchase at INR 4,000. Due to the millers' reluctance to export at lower prices, much of the sanctioned quantity has not moved out of the country yet, market participants said.

 

Sugar futures prices at the Intercontinental Exchange are currently at $493.80 per tonne and exporters are demanding $30-$40 premium to that, said Dilip Patil, former managing director at Samarth Sahakari Sakhar Karkhana Ltd. in Jalna, Maharashtra. Owing to this, only around 400,000 tonnes of sugar has been exported till now. Exporters have given contract for another 250,000 tonnes of sugar from the millers, but they are yet to find buyers, Sood said.

 

Due to sluggish demand from exporters, some millers have now cut their for export quotation price to INR 4,200 per 100 kg from INR 4,500. But they are not ready to sell at INR 4,000 as it would not be feasible for them to meet logistics expenses, market participants said. Moreover, the rupee has strengthened against the dollar, which is why millers are reluctant to sell, Patil added. When exports were allowed rupee had slumped to around 87 per dollar.

 

Currently, there is a sluggish demand in the domestic market despite anticipation of lower sugar output. With a carryover stock of 8.0 million tonnes and an estimated sugar output of 26.40 million tonnes, which is lower than the previous season, the total sugar availability in 2024-25 is seen at 34.40 million tonnes. Yet, millers are waiting for higher domestic prices to sell sugar instead of exporting at a lower prices, Sood added.  End

 

US$1 = INR 84.83

 

Edited by Subhojit Sarkar

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.