Indian sugar body seeks Govt. nod for extra exports

Wednesday, 27 July 2011 00:25 - - {{hitsCtrl.values.hits}}

NEW DELHI (Reuters): A top industry body in India has sought the government’s nod for an additional 500,000 tonnes of sugar exports in the year to September, a demand if met could help ease global prices that are creeping up on supply worries from top exporter Brazil.

“We have written to the food ministry for permission of additional sugar exports as we’ve got surplus stocks and global prices are good,” said Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories, a producers’ body of 250 mills. India, the world’s top sugar consumer and biggest producer after Brazil, has permitted exports of 1 million tonnes of sugar this year under the open general licence (OGL) scheme to support local prices that fell below production cost as supplies exceeded demand -- shedding around 5 percent since January. India has ample stocks and looks set to produce over 24 million tonnes in this marketing year, against about 22 million tonnes of consumption. Kumar said the additional exports would help millers to pay cane growers on time amid rising global prices on lower output prospects from Brazil.

New York raw sugar futures hit a contract high in early trade on Monday, supported by diminishing crop prospects from Brazil.

Kumar said Indian mills have produced 24 million tonnes of sugar from last October to mid-July this year against 18.6 million tonnes a year ago.

He also said good monsoon rains so far have brightened the output prospects for 2011/12. As on July 20, cane acreage stood at 5.16 million hectares against 4.9 million hectares a year ago, farm ministry data showed last Friday.

Kumar said the carry-over stocks from the 2010/11 season was estimated at 5.9 million tonnes as against 5.0 million tonnes in the beginning of the year in October.

“It looks like next year’s production will be 26-26.5 million tonnes,” Kumar said, adding the higher production in 2011/12 could leave an exportable surplus of at least 2 million tonnes. The chief of trading firm ED & F Man Commodities India last week told Reuters in an interview that mills could export 3 million tonnes of sugar in 2011/12.