India could export 6,000,000 tonnes of sugar this season, even without subsidies. Global prices make overseas sales more profitable after they have risen to their highest level in 4 1/2 years, industry officials stated Wednesday.
New Delhi will likely withdraw sugar export subsidies for the new season, as a sharp increase in prices makes it easier to sell on world markets, according to the Ministry of Consumer Affairs, Food, and Public Distribution's most senior civil servant.
B.B. stated that India could export 6,000,000 tonnes of sugar even without the subsidy if the market is stable at above 20 cents per kg. Thombare is president of the West Indian Sugar Mills Association.
On Tuesday, New York's benchmark raw sugar prices hit a 4-1/2 year high of 20.37 Cents. This was supported by fund buying in the face of tightening supply. It closed at 20.17 Cents on Wednesday. [SOF/L]
According to Reuters, a government letter addressed specifically to sugar producers in India suggested that India's sugar mills should export 6-7 million tonnes of sweetener by 2021-22 to take advantage of higher global prices.
The world's second-largest sugar producer could export to limit the rise in global prices. This would also help boost supplies in Asia, Africa, and Asia. Meanwhile, Brazil, the world’s largest exporter, is expecting to harvest a smaller crop because of drought and frosts.
According to Czarnikow, Brazil's 2021/22 center-south sugar production will fall to 32.5million tonnes in December from 34.1 million tonnes in June.
"Every month, traders reduce production estimates for Brazil. There is a possibility that supply will be very limited on the global market between November and March, so someone must step in. India could do it because it has plenty of stocks," stated a Mumbai-based dealer in a global trading firm.
After Reuters reported that India may withdraw sugar export subsidies, Indian sugar producers' shares fell as much as 5%.
Indian traders are cashing in on rising sugar prices and have signed contracts to export 725,000 tonnes of raw sugar and 75,000 tons of white sugar.