Indian sugar exports continue to lag behind the government's 5 million mt target for the current marketing year, on the back of weakening global prices, making it unattractive for local mills to export.
Total contracts for exports have accumulated to approximately 2.85 million mt, with 480,000 mt in the export pipeline for the current season and 243,811 mt were lined up for loading at various ports, according to the Mumbai-based logistic handling company Dr Amin Controllers Pvt Ltd.
India's sugar mills are expected to fulfill export obligations as per allotted quota for the marketing year to reduce the supply glut in domestic markets. "Mills are shying away from exports as global prices are not attractive at the moment," an official from the Indian Sugar Mills Association said.
According to trade sources, several destination markets, such as East Africa and Sri Lanka, that typically import Indian white sugar have shifted their buying interest to Thai-origin sugar given the price differential.
"Indian mills have export quotas to fulfill before the new season starts in October. However, local mills do not see much value in exporting given the high domestic prices," a trader based in Singapore said.
Indian low quality whites for spot June-loading cargoes stood at $340/mt FOB west coast India, which is a $5-$10/mt premium to Thai 45i refined sugar on a flat price basis.
If India's export situation remains lackluster, the country would be faced with a higher carry-over stock of between 14 million-15 million mt in the upcoming season, trade sources said.
"The larger stock, coupled with high domestic prices, does not look optimistic for the Indian market. They will be sitting on stocks that it is equivalent to eight to nine months of consumption," a source from a Bangladeshi mill said.