Sugar Exports from India May be Delayed by a Month

Sugar sales from India, the second- biggest producer, may start by end of February, about a month later than expected, as sellers with smaller tonnages take time to find buyers, according to industry officials.

The food ministry allowed 535 mills to sell 500,000 metric tons overseas with quotas ranging from 8.4 tons to 4,822.8 tons, according to a government notice dated Jan. 1. Permits to ship will be issued after Jan. 30, the last day by which mills can seek permission, Farm Minister Sharad Pawar said yesterday.

Sugar futures in New York reached the highest level in 30 years last month on concern that supplies from Brazil, the top producer, and India, may be too low to meet demand. The South Asian country yesterday exempted sugar imports from a tax until March 31 to rein in food-price inflation.

“There’s a delay of about 20-30 days on exports,” Yatin Wadhwana, managing director of Sucden India Pvt., said today in an telephone interview.

India, the largest consumer, may produce 25.5 million tons in the year from Oct. 1, compared with 18.9 million tons a year ago, Abinash Verma, director general of the Indian Sugar Mills Association, said in an interview today. Exportable surplus may be 2 million to 2.5 million tons this season, and opening stocks on Oct. 1 likely totaled 5.8 million tons, he said.

“There’s an immediate market in Sri Lanka, Pakistan, Dubai and Indonesia,” Verma said. “Most of the physical shipments will start in about 30-40 days as people will take some time to finalize contracts.”

A sugar surplus spurred the Indian government on Dec. 15 to allow shipments of 500,000 tons. The plan hasn’t been scrapped, Pawar said yesterday in response to a Reuters report on Jan. 7 that the export proposal may be reviewed to cool food prices.

“I don’t see any problems with India production as there’s plenty of cane and crushing capacity available,” Wadhwana said.

source: bloomberg