Sugar makers in India are signing deals with traders and exporters on optimism that the government would soon announce overseas sales quotas for the season that starts this month.
Mills in the South Asian country, which vies with Brazil as the world’s top sugar producer, have so far contracted to export about 1.2 million tonnes and aim to ship as much as 8 million tonnes in the 2022-2023 year, Meir Commodities India Pvt managing director Rahil Shaikh said.
“The golden opportunity for us is to export between November and May amid a lower crop in Brazil,” said Shaikh, whose company traded about 500,000 tonnes of sugar in the domestic and overseas markets in the 2021-2022 season. “There is a shortage of white sugar and the market is tight globally.”
Photo: Reuters
Indian producers are seeking to take advantage of the rally in benchmark futures amid concerns supplies would tighten, mainly in top exporter Brazil. Rain in the center-south region of the South American nation, the main growing area, has slowed the pace of cane crushing potentially, boosting prices.
Exporters are offering Indian mills about 35 rupees (US$0.42) per kilogram for low quality white sugar compared with the domestic price of 33 rupees, while raw sugar is attracting a price of 33.5 rupees from international buyers, Shaikh said.
The refined variety is fetching 38.5 rupees from overseas buyers compared with a local market rate of 36 rupees, he said.
Among destinations for raw sugar are Indonesia and Bangladesh, while low quality white sugar can be sold to the Horn of Africa region, Sri Lanka and Afghanistan for direct consumption, with good demand now, Shaikh said.
The refined variety can be sold to Sudan, Somalia and the Middle East, he said.
Domestic sugar production is forecast at 35.5 million tonnes this year, while consumption is seen at 27.5 million, the Indian Sugar Mills Association said.
Meanwhile, the cost of candy and chewing gum in the US rose 13.1 percent last month from last year, the most ever, US inflation data showed, as US refined sugar prices have soared this year after drought hurt beet-sugar crops in northern states.
The sharp rise comes just as the biggest holiday in the US for candy, Halloween, is about to start.
Chocolate has also been hit by inflation in the past few months, partly because of higher costs for chocolate makers. Supply chain chaos caused by the COVID-19 pandemic and then the war in Ukraine have been spilling over into cocoa markets.
In other commodities, gold for December delivery fell US$28.10 to US$1,648.90 per ounce, down 2.72 percent weekly, while silver for December delivery fell US$0.85 to US$18.07 per ounce, down 10.28 percent for the week.
Additional reporting by AP
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