New Delhi: Indian mills are holding off on signing new sugar export contracts as falling global prices and a strengthening rupee have widened the gap between local and global rates, industry officials told Reuters.
Lower shipments from the world’s No. 2 sugar producer could support global prices that fell to their lowest in 5-1/2 months on Monday but could also prompt Indian mills to divert more sugar for ethanol production.
“At current price level exports are not viable from India. Mills are getting much higher prices in the local market,” said Ravi Gupta, chairman of export committee at All India Sugar Traders Association (AISTA).
In the local market mills were selling sugar at Rs 32,000 to Rs 35,000 per tonne compared to around 30,000 rupees offered for overseas shipments, dealers said.
Mills aggressively sold sugar when international prices were around 20 cents per lb, said Rahil Shaikh, managing director of MEIR Commodities India.
Stockpiles have come down to comfortable levels and there is no pressure on mills to sign new deals, Shaikh said. Indian mills have so far signed contracts to export 4 million tonnes of sugar in 2021/22 marketing year ending on Sept. 30, dealers estimate. The country exported a record 7.2 million tonnes of sugar in 2020/21, taking advantage of the government subsidy for overseas sales.
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