: Govt may allow additional 1.2 MT sugar exports due to surplus production #finance #StockMarketNEWS Govt may allow additional 1.2 MT sugar exports due to surplus production New Delhi, July 29 (KNN)

Govt may allow additional 1.2 MT sugar exports due to surplus production #finance #StockMarketNEWS
Govt may allow additional 1.2 MT sugar exports due to surplus production New Delhi, July 29 (KNN) The government is planning to allow an additional 1.2 million tonnes (MT) of sugar exports in the 2021-22 season, above the 10 MT already fixed. This decision comes due to higher-than-anticipated domestic production.

“This extra quota will be good enough to absorb the surplus production and still leave around 6-6.8 MT of sugar as closing stocks, which is roughly three-four months of consumption,” a senior industry official said.

In the current year, the Sugar production is now estimated to be over 36 MT, against the earlier expectation of 35 MT.

According to Indian Sugar Mills Association (ISMA) estimates, India’s sugar production in the 2022-23 season (October to September) is expected to be around 39.97 MT, which will be around 0.6 MT more than the current year’s production of 39.4 MT.

After factoring in around 3.4 MT of sugar diverted for ethanol blending in the current sugar season, the actual sugar available for consumption is expected to be around 36 MT, the body said.

It added that there will be more ethanol production in 2022-23, and hence more diversion, as the country aims for higher blending percentage keeping in mind the targets set by the Centre. So, in 2022-23, diversion towards ethanol production will be around 4.5 MT, ISMA said.

ISMA pointed out the need to export the excess sugar in order to avoid a glut in the domestic market, leading to lower prices. This will result in the sugar mills will be unable to recover their costs. They will ultimately be forced to default on cane payment to farmers.

It added that there is a need to expedite the decision on allowing exports next year as well because international sugar prices are falling and raw sugar prices, which were hovering around 19 cents per pound, have dropped to around 17.5 cents per pound.

“The industry feels that in case the government further delays announcing export policy for next year, the international sugar prices may weaken further, as a result of which the government may have to extend export support to the sugar mills to make exports remunerative for mills,” ISMA said in the letter. (KNN Bureau)