India’s mills increase sugar production, but take away from exports

India has greater sugar production this harvest, but should reduce the pace of exports after the recent slowdown in the commodity’s prices on the international market.

From the beginning of the harvest until November 30, the sugar production in the country grew 9.7% compared to the same period of the last harvest, to 4.721 million tons, according to the Association of Indian Sugar Mills (ISMA).

Advancement of milling
The increase reflects the early start of cane crushing at mills in west India. As of November 30, there were 416 units in operation, compared to 409 a year earlier. Production is further along in Maharashtra and Karnataka, but still behind in Uttar Pradesh.

Exports of 3.5 million tons of sugar have already been contracted for shipment this harvest, according to data collected from trading companies by the association. Most of this volume was stopped when international prices were in the range of 20 to 21 cents per pound.

But with the recent drop to below 19 cents a pound, ISMA says mills are unlikely to continue signing new export contracts. According to the association, due to the current high production costs, new business should only resume when prices return to around 21 cents a pound.

Source: Valor Econômico

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