India may hold the key to world supply

With Brazil unlikely to ease sugar market supply concerns in the short term and its rising demand for ethanol India’s sugar exports under Open general Licence (OGL) may hold the key to market supply and consequently an easing in sugar prices which currently stand at near 30 year highs.

With up to 25% of Australia’s sugar crop lost to cyclone Yasi and tight global supply, India may be pivotal to the market establishing whether the decision recently announced by India approving 500,000 tonnes of sugar exports under its sugar OGL is to be ratified.  The decision has been referred by a government keen to ensure that sufficient supply exists for domestic consumption before permitting such exports to proceed.  A review of the decision and its possible ratification are yet to take place.

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