With international prices showing an upward trend for the past couple of months, Maharashtra’s sugar millers are confident of meeting at least 80% of the target set by the government.
This is likely to reduce the state’s inventory and reduce sugar stockpiles, industry people said, adding that they expect prices to go up by April. March and April could turn out to be months of opportunity for the country’s sugar sector with demand picking as summer begins. The government has set a target of 60 lakh tonne of sugar export for the 530 odd sugar mills in the country. A shortage of sugar in the international market could prove to be a major opportunity for Indian exporters.
The government has set a sugar export target of 60 lakh tonne. Last year, the government had asked millers to export 50 lakh tonne, but they managed to export 38 lakh tonne. Of the 60 lakh tonne of MAEQs issued by the government, around 35 lakh tonne has already been contracted which leaves another 25 lakh tonne of exports, industry people said. Exporters say that about 16-17 lakh tonne have been exported and about 32-33 lakh tonne of export contracts have been signed.
According to Sanjay Khatal, MD, Maharashtra State Cooperative Sugar Factories Federation ( MSCSFF), there has been some impact of the coronavirus scare on the export front since the goods are not moving as smoothly as earlier.
“There has been some impact on the movement but our country does not export much sugar to China and therefore there should not be much concern among millers,” Khatal said. Mukesh Kuvediya, secretary general, Bombay Sugar Merchants Association said that international prices have come down by $ 20 per tonne in the last couple of days due to lack of demand.
Isma has revised sugar estimates to around 275 lakh tonne from the earlier estimate of 270 lakh tonne. There was demand at the start of the month which petered down in the middle of the month, affecting the overall sentiment in the market, Khatal added. Once the coronavirus fears settle down in the next fortnight, prices are likely to go up again, he says, adding that India is likely to export at least 50 lakh tonne this season. “India also exports sugar to Iran but I do not see much impact on the overall market,” he said.
India is also looking at Indonesia as a possible export market. Indonesia annually imports 35-45 lakh tonne sugar and is the second largest importer of sugar after China. Thailand is usually the main supplier of sugar to Indonesia which is currently facing shortage of sugar, resulting in high domestic prices.
Of the 60 lakh tonne of MAEQs issued by the government, around 35 lakh tonne has already been contracted which leaves another 25 lakh tonne of exports, Khatal said. This could be a golden opportunity for Indian millers since there is no other country other than India in global market with sugar in hand, Prakash Naiknavare, MD, National Federation of Cooperative Sugar Factories had said earlier.
Khatal says that mills in Maharashtra have export targets of 18 lakh tonne and may be able to meet most of their quotas. B B Thombare, president, Western India Sugar Mills Association ( WISMA) said that the state may be able to export 12-15 lakh tonne of sugar this season.
In Maharashtra, sugar production till February 29 this year was 50.70 lakh tonne, compared with 92.88 lakh tonne produced last year same period. In the current 2019-20 sugar season, out of 145 sugar mills operated, 25 sugar mills have ended their crushing due to non-availability of cane in their area.