India to allow more sugar exports to avoid contract defaults

By Pratik Parija

India, the world’s second-biggest sugar producer, will permit millers to export an additional 12 lakh tonnes in the year ending in September, Food Secretary Sudhanshu Pandey said on Friday.

That’s on top of the current export quota of 1 crore tonnes, which the government set in May to curb overseas sales and protect food supplies. With inventories now appearing enough to satisfy local consumption, growers had asked for the limit to be raised to prevent defaults on committed contracts.

Sugar shipments are expected to reach 1.12 crore tonnes in 2021-22, Pandey told reporters in New Delhi, adding that an official notification is expected later Friday. Additional exports from India may exert further pressure on global prices, which have sunk about 13% from this year’s peak in early April.

Preliminary reports indicate the sugar-cane area in top growers Uttar Pradesh and Maharashtra is higher for the crop to be harvested in the season starting in October, suggesting supplies are adequate going into next year, according to Aditya Jhunjhunwala, president of the Indian Sugar Mills Association.

Even after exporting about an additional 10 lakh tonnes, the country will have more than 60 lakh tonnes in closing stockpiles on Sept. 30, enough to meet local demand before cane crushing starts, Jhunjhunwala said last month.

India was the top sugar exporter after Brazil last year and counts Indonesia, Bangladesh, Malaysia and Dubai among its customers. India rarely shipped more than 70 lakh tonnes until last year, when exports hit a record 72 lakh.