Sugar mills in India, the world’s No. 2 producer of the commodity, are making a push to persuade the government to triple permitted exports so that producers, and their stocks, can capitalize on a recent surge in prices.
After sliding since the start of the year, sugar futures have jumped due to a slow harvest season in Brazil, the world’s largest producer, and to port congestions in Thailand, the world’s second largest exporter.
“International prices are very high, but [India’s] producers will only benefit if exports are allowed beyond [the currently allowed] 500,000 tons” for this year, says Sageraj Bariya, agriculture and retail analyst at Angel Broking in Mumbai.
A sweet opportunity
New Delhi has imposed export controls to ensure that India’s enormous consumption needs are met, even as it has struggled to contain the impact of high food prices domestically.
The Indian Sugar Mills Association, a trade group that represents producers, is now upping the ante, asking the government to relax restrictions to allow them to export an additional 1.5 million tons of sugar.
“We are seeing a very good opportunity for this to take place,” says Abinash Verma, ISMA’s director general, who made the request with the government earlier this week.