Mumbai: Indian sugar mills have signed deals to export raw sugar for the first time in three years as a rally in New York prices to seven-month highs along with government subsidies made exports lucrative, five dealers and two industry officials told Reuters. Mills in the world’s second-biggest sugar producer were reluctant to sign new export contracts until recently as global prices were trading far below local prices. But a rally in international raw sugar prices along with the rupee hitting a record low has made exports viable.
Mills have contracted to export 150,000 tonnes raw sugar at around $280 per tonne on a free-on-board basis for shipment in November-December, the dealers said. More Indian exports could weigh on global prices and trim the market share of rivals Brazil and Thailand, the world’s top two sugar suppliers. Indian mills traditionally produce white sugar for local consumption, but this year they are planning to export raw sugar as the country faces a surplus harvest for the second straight year. “In the last few days suddenly things are moving in favour of Indian mills,” said B. B. Thombare, president of the Western India Sugar Mills Association.