Declined sugar export has forced sugar industry to demand creation of a sugar buffer stock of 2-2.5m tonnes. Sugar output in the country is expected to touch 18.2m tonnes as against 15.4m tonnes produced last year. The country is all sent to achieve a record carryover stock of 10mt on October 1, ’00 as against 6.7mt same time last year. Currently the industry is burdened with huge carryover stocks of this season as well as the last season.
Industry sources opine that due to lower realisation, higher domestic production cost and lack of govt. subsidies, the open market export scenario may not be viable. Export prospects seem to be dim with global prices ruling at $230-$235 per tonne and Indian prices about $15-20 higher.
Industry sources said, in last two years, about 2.8m tonnes of sugar was imported into the country. In addition, India had good crop for three consecutive years. The current glut situation only demands that additional sugar which come into the country should be converted into the buffer so that the millers can get rid of excess stocks.
Meanwhile, Brazil’s sugar crop, currently being harvested, is expected to fall by 29% this year to 14m tonnes, from 19.6m last year. Brazil’s sugar exports plunged in value, partly as more sugar was used to make ethanol, a motor fuel, for the domestic market. exports from Brazil fell 91% to $11.6m in May ’00 from $130.8m in the corresponding month of the previous year. For the first five months of the year, sugar exports were down 58% to $253.9m from $603.4m in the corresponding period of the previous year as reported by Mumbai market.
Market
Update
(Sugarcane)
