With the world sugar market moving into deficit for the current 2019-20 season, the International Sugar Organisation (ISO) is promoting India as an export hub for neighbouring countries to import from. Jose Orives, executive director of ISO, told The Indian Express that the move was to “re-energise the world sugar stocks and to improve global sugar prices”.
Orives, who was in Pune Friday to speak at the second International Conference organised by Pune-based Vasantdada Sugar Institute, pointed out a 5.5 million tonnes (mlt) shortfall in global sugar production this season. “As against the consumption forecast of 176.5 mlt, the season’s production estimates stand at 170.4 mlt,” he said. This would be the first deficit year after two back-to-back surplus seasons in 2017-18 and 2018-19.
According to ISO predictions, sugar exports for 2019-20 season would be around 58.5 mlt, much lower than the record 66.32 mlt reported in 2015-16. India with 8-10 mlt of stock has the largest surplus and so the ISO was promoting the country as export destination for neighbouring countries like Iran, Bangladesh and Myanmar. “While this will help re-energise the sugar stocks in the country, it will also help improve the world markets by evenly distributing supplies,” Orives said, adding that India’s stocks was acting as a dampener for prices.
Exports from India have picked up steadily, with the country reporting signing of contracts for shipping out of around 2.8 mlt of the sweetener. Majority of this has been cornered by the mills in Uttar Pradesh while mills in Maharas-htra have reported only about 0.4-0.5 mlt of contracts.
Orives said Brazil, the largest sugar producer in the world, had maximised its ethanol production and removed 10 mlt of sugar from the market. For the current season — mills in Brazil started their operations in April — the international prices of sugar and of oil will dictate how much cane is diverted for production of the fuel additive. If raw sugar prices breach the 15 cent/lb mark, Orives said Brazil might choose to produce more sugar than ethanol.
Orives said a gradual slowdown in sugar consumption was a concern for the sector. Regions such as western and central Europe have been reporting a negative growth in terms of sugar consumption, with governments resorting to sugar tax to control consumption. The ISO has initiated communications with various governments to correct misconceptions about sugar consumption, said Orives. Till 2000s, the growth in consumption was around 2 per cent per annum, which now has come down to 1.3 per cent.