Indian sugar mills association

Local sugar prices turn sweet, traders prefer to sell crop here

Date:	01 Feb 2016

Source:	The Economic Times

Reporter:	Isis Almeida

News ID:	5222

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MUMBAI: A surge in Indian sugar prices means the world's second-largest supplier will sell more on the domestic market and less abroad. India will export less than 50% of what the government ordered, according to ED&F Man Holdings and Olam International.

While expectations for Indian exports were bearish for the market six months ago, the estimates are being lowered, according to John Stansfield, analyst at soft-commodities trader Group Sopex.

Indian sugar prices rallied more than 30% in the past five months on expectations that the current crop will turn out smaller than initially forecast. The gains mean the nation's millers make more money selling their production locally, Jack Hannon, an analyst at Olam, said before the Dubai Sugar Conference, a private event for 400 industry leaders starting Sunday.

"Exports are more derived by price than by policy," Piero Carello, a London-based general manager at Olam, said on Saturday in an interview in Dubai before the event. "We don't see India as a relevant factor to the world market." Prime Minister Narendra Modi's government in September ordered mills to compulsorily export 4 million metric tonnes in the 2015-16 season that started in October and offered a subsidy on the shipments.

Less than half of that will be shipped, estimated Kona Haque, head of research at ED&F Man. El Nino-induced dry weather is reducing production, with sugar mills association cutting its 2015-16 output estimate by 1million tonne.

EU Sugar Exports may Miss Quota on Low Crop

The European Union is poised to miss its sugar export quotas this season as a reduced harvest limits overseas sales, according to independent soft commodities trader Group Sopex. The EU's 28-member nations will probably ship less than 1million metric tonnes in the season that started in October, John Stansfield, a Sopex analyst, said in an interview before the Dubai Sugar Conference, a private event for 400 industry leaders that started Sunday.

That's less than the 1.35 million-ton quota established by the EU under World Trade Organization rules. Licenses have been issued to export 650,000 tons so far.

Bulls Likely in Sugar Market

Bloomberg Singapore: The global sugar market is turning bullish as world exports are set to trail rising demand, according to Singapore-based Olam International, one of the world's largest food traders. Supply and demand fundamentals are "constructive" this year and bullish for the next, Piero Carello, a London-based general manager at Olam, said. The global shortage will be driven by the need for countries to import, he said. Sugar futures traded in New York rose 5% last year, ending four annual losses, on forecasts for shortages in the 2015-16 season that started in October.The sweetener was the third-best performer in the Standard and Poor's GSCI index of 24 raw materials after cocoa and cotton.

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