Sugar mills seek export permission as prices crash
India’s sugar mills seek approval to export 2 million tonnes in 2024-25 amid declining domestic prices. ISMA estimates 2024-25 production at 32.5-33 mt, with 4 mt for ethanol and 28-28.5 mt for consumption, leaving 8-8.5 mt in stock. Mills urge early export clearance before Brazil’s April harvest to ensure better prices and maintain liquidity for timely farmer payments.
Private sugar mills have sought approval for exporting 2 million tonnes (mt) of the sweetener in the 2024-25 crushing/marketing year (October-September).
This comes even as ex-factory sugar prices are ruling at Rs 33-34 per kg in Maharashtra and Rs 36-36.5 in Uttar Pradesh, as against their corresponding year-ago levels of Rs 36-37 and Rs 38-38.5 per kg.
“If realisations remain low, it will adversely impact the liquidity of mills and their ability to make timely payments to sugarcane farmers. The earlier the government allows exports, the better,” said Gautam Goel, vice-president of the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).
The Centre has not permitted sugar exports since 2023-24, after three years of record shipments – 7.19 mt in 2020-21, 11.07 mt in 2021-22 and 6.40 mt in 2022-23 – led to concerns over domestic availability amid overall rising food inflation. Sugar stocks fell to 5.56 mt at the end of 2022-23.
‘Situation back to surplus’
The industry believes that the situation is back to surplus, with the new sugar year from October 2024 opening with stocks of 8 mt. “We expect gross sugar production this year at 32.5-33 mt, of which 4 mt would go for ethanol manufacture. Taking domestic consumption of 28-28.5 mt, we would close with 8-8.5 mt of stock, which is more than the normative requirement of 5.6 mt on October 1,” Goel told presspersons at ISMA’s annual general meeting here on Thursday.
ISMA has lowered its earlier production estimate of 33.3 mt for 2024-25. The latest estimate is still higher than the 32 mt of Centre, which has also pegged domestic consumption slightly higher at 29 mt. “Last year’s consumption was high (29.5 mt) because of elections. This year, going by the sales trend so far, we don’t see it go beyond 28.5 mt,” added Goel.
ISMA President M Prabhakar Rao said that the industry and government will have a clearer picture of production by January. “They can maybe allow us to export 1 mt immediately and take a decision on another 1 mt in January. This is an opportune time because mills in Brazil will start crushing from April and we have a window to get a good price between now and April,” he pointed out.
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Source : Indian Express
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