Indian Mills to Focus on Export of Raw Sugar as Brazil's Supply Declines

Six industry insiders told Reuters that Indian mills intend to manufacture raw sugar at the start of the new selling season, which begins on October 1, as world prices rise to four-year highs, boosting demand for so-called raws from outside.

Indian sugar mills have traditionally produced white sugar for domestic use and limited amounts of raw sugar for export.

However, projected supply constraints in international markets in the December quarter, following drought and frost damage to Brazil's sugarcane crop, led Indian mills to schedule raw sugar output for export.

“We intend to begin the season with raw sugar rather than white sugar since it is easier to export. Prices are likewise appealing and are anticipated to continue steady", BB Thombare, president of the West Indian Sugar Mills Association, said,

As the world's largest exporter, Brazil, is expected to produce a lower crop than last year, India's exports might control worldwide prices and assist bolster supply in Asia.

According to dealers, mills have committed to export about 7,25,000 tonnes of raw sugar and 75,000 tonnes of white sugar from November to January.

However, despite the fact that several mills in Maharashtra's western state have opted to manufacture raw sugar for export, they are not selling it in advance since they expect prices to grow even higher overseas, according to a Mumbai-based dealer with a global trading business.

“Mills prefer to sell on the moment rather than sign advance contracts,” he explained.

According to Praful Vithalani, president of the All India Sugar Trade Association (AISTA), exporters are willing to buy raw sugar from mills for about Rs 32,000 ($431) per tonne, but producers are not willing to sell.

According to Vithalani, India might export at least 6 million tonnes of sugar in 2021-22, up from 7.1 million tonnes this year.

Local sugar prices have risen 10% since mid-July, to the highest level in nearly four years, thanks to strong export demand.