Why Indian traders are struggling to secure sugar export contracts
Indian traders face challenges securing sugar export contracts despite government approval for 1 million tons, as mills demand high premiums over London prices. Overseas buyers are unwilling to pay, stalling deals. India’s reduced exports could stabilize global prices after recent lows. The government allowed exports to prevent domestic oversupply and support sugarcane farmers’ livelihoods.
Indian traders are facing difficulties in securing export contracts for sugar, even after the government permitted the export of 1 million tons, according to a Reuters report.
This challenge arises as sugar mills in India are demanding a substantial premium on top of the prevailing London sugar prices, according to four trade sources quoted by Reuters in the report.
Overseas buyers, however, are reluctant to accept these elevated prices, creating a stalemate in the export market.
The decrease in sugar exports from India, the world’s second-largest sugar producer, is expected to have a positive impact on global sugar prices.
This comes after a period where global sugar prices experienced a significant decline, reaching a three-year low this week.
The slower pace of shipments from India could potentially reduce the oversupply of sugar in the global market, thereby helping to stabilize and potentially increase prices.
This development is likely to be closely monitored by sugar traders, producers, and consumers around the world, as it could have implications for the global sugar market and the broader agricultural commodity sector.
India lifts export restriction
In a move aimed at supporting domestic sugar mills and stabilising local prices, India decided to permit exports during the ongoing season ending in September.
This strategic decision comes as India, the world’s second-largest sugar producer, grapples with a surplus of sugar stocks.
By facilitating the export of excess sugar, the government seeks to prevent a glut in the domestic market, which could lead to a sharp decline in sugar prices and adversely impact the livelihoods of sugarcane farmers.
To read more about Sugar Industry continue reading Agriinsite.com
Source : Investing.com
Recommended for you
Leave a Reply
Leave a Reply
