Tag Archives: india

Indian sugar industry faces a difficult year ahead

The Indian Sugar Association (ISMA) stated that the sugar industry may face a difficult year with opening stocks for the 2013/14 season that commenced in October standing at 8.5 million tonnes up from opening stocks of 6.2 million tonnes for the 2012/13 season equivalent to three months demand.

ISMA estimates production during the season to be 25 million tonnes and demand to be 23.5 million tonnes.

State support may be required by the industry. Payment arrears to farmers are also expected to increase.

Crushing is expected to start after announcement of the State Advisory Price (SAP). The sugar surplus is likely to result in mills looking to export sugar putting downward pressure on sugar prices.
Continue reading

Advertisements

Sugar prices fall as India allows OGL exports

Contrary to some expectations India has allowed 500,000 tonnes of sugar exports under its Open General licence (OGL).  Despite forthcoming local elections and some concerns over agflation India has permitted the full 500,000 tonnes for export. Previously 200,000 tonnes had been expected following comments in recent days.

It is expected that over 1 million tonnes of sugar for export will be approved under OGL during the year once India has confirmation of the size of its crop.  India is the world's second largest grower.

India procrastinates at the expense of exporters

India is still to announce whether the decision to permit 500,000 tonnes of sugar for export is to be ratified.  Sugar prices have fallen sharply recently and India’s indecision may cost exporters if after delays the panel of ministers approves sugar exports under its Open General Licence (OGL).

India is the world’s second largest producer of sugar after Brazil. The delay in confirming OGL exports had been to ensure sufficient domestic supplies and to avoid the impacts of agflation.

India is expected to produce between 24.5 million tonnes and 25.5 million tonnes of sugar.  Indian consumption is in the region of 22 million tonnes. Indian whites were available at $720 per tonne down by approximately $50.

India raises price paid to cane farmers

India has raised the price at which sugar mills buy cane from farmers from 139 Rupees per 100 kg of cane to 145 Rupees per 100 kg.  The price increase is effective as of 1 October 2011 at the start of the coming season.

$1 is equal to approximately 45 Rupees.

Will India make up its mind?

No decision was reached during the previous meeting on whether to permit up to 500,000 tonnes of sugar exports under Open General Licence (OGL) due to the absence of a number of government ministers.  Discussions were widened to include a number of Indian government ministers due to the political sensitivity of the ‘agflation’ issue and the risk of food price rises.  A decision on the matter may be made in the next two weeks.

India’s indecision has ensured that sugar prices remain high in the face of tight supply.  India is the second largest producer of sugar and its largest consumer.

India discuses sugar but defers decision on OGL

The indian government discussed sugar prices and domestic sugar stocks today.  The panel chaired by Finance Minister Pranab Mukherjee discused the topic which was scheduled on the agenda for today’s meeting but did not reach a decision due to the absence of Sharad Pawar the Minister for Agriculture, Anand Sharma the Commerce Minister and K.V. Thomas the Food Minister.

Indian exports have not been banned but sugar shipments have had restrictions placed discouraging exports to protect domestic sugar supply in the wake of rising agflation.  Sugar currently sells at Rs 32-35 per kg retail. Prices have been relatively stable for past few months due to higher production.

Sugar production is expected to be 24.5 million tonnes during the 2010/11 season which started in October and runs through to July.  Production is up from 19 million tonnes last year. Domestic consumption is approximately 22 million tonnes.

The Sugar Mills Association has suggested that one million tonnes of sugar should be permitted for export under OGL due to this being surplus to India’s domestic consumption. 

A further meeting of the panel is expected in the next few weeks.  The sugar market awaits the decision in an indication that supply will ease.

UBS takes delivery against futures

UBS takes delivery of 84,000 tonnes of white sugar at expiry of the March No. 5 white sugar futures contract.  The March white sugar futures contract expired last week. The sugar was delivered at Indian ports on FOB terms.  Louis Dreyfus was the seller.

The May white sugar futures contract was down $4.5 to settle at $750.5 per tonne. While the March raw sugar futures contract is trading near its open at 31.29 cents per lb with volume currently at of 58,585.