Sugar factories slow on new export contracts amid falling world raw sugar prices (ISMA)
Industry body ISMA said on Monday that the signing of new export contracts by sugar factories had “slowed down a bit” due to falling world prices for raw sugar, but there is still time for export deals. sweetener.
In the first two months of the current 2021-22 season which started in October, the sugar factories exported over 6.5 lakh tonnes of sugar compared to 3 lakh tonnes in the period of the previous year. The sugar factories have contracted for the export of 37 lakh tons so far in the current season, he said.
However, most of these contracts were signed when world raw sugar prices were between 20 and 21 cents per pound.
“The signing of new export contracts has slowed down a bit over the past two weeks due to the drop in world raw sugar prices to around 19 cents per pound,” said the Indian Association of Sugar Mills (ISMA ) in a press release.
Currently, ISMA said world prices have recovered to some extent and hover around 19.5 cents per pound, but exports are still not viable for Indian sugar.
There is a general opinion that, given that there are still more than nine months left in the current season, the sugar factories have enough time to wait for the opportune moment to conclude export contracts, he noted. .
“International trading houses are also of the view that world (sugar) prices will need to rise from current levels if the world is to have Indian sugar factories exporting a few million tonnes of sugar again in the next 7-8 months. or so, ”ISMA said.
The country’s sugar production reached 77.91 lakh tonnes through December 15 of the current 2021-22 season, more than 73.34 lakh tonnes a year ago.
“The production for the current year is slightly higher due to the earlier start of the crushing of sugar cane in the western region of the country,” ISMA said.
However, production in Uttar Pradesh, the country’s main sugar-producing state, stood at 19.83 lakh tonnes through December 15 of the current season. This is lower than the 22.60 lakh tonnes from the same period last season.
Production in Maharashtra, the country’s second largest sugar-producing state, reached 31.92 lakh tonnes compared to 26.96 lakh tonnes during the said period.
The higher production in Maharashtra is due to the earlier start of milling operations in the state and greater availability of sugar cane during the current season, ISMA said.
In Karnataka, the third largest sugar-producing state in the country, production reached 18.41 lakh tonnes through December 15 of this season, up from 16.65 lakh tonnes a year ago.
On the ethanol front, ISMA said 302.30 million liters of ethanol have been supplied during the 2020-21 ethanol season which ended in November, reaching a mix average of 8.1% across India.
“This is a record in itself, significantly above the 5% ethanol blending level achieved in 2019-2020,” he said.
Going forward, the government has set a goal of achieving a nationwide 10% ethanol blend in the current season.
Against a total requirement of 459 crore liters of ethanol for a 10 percent blend, petroleum marketing companies have so far allocated a total of 366 crore liters after the first two cycles of expressions of interest (EoI). .
“We hope and plan to achieve 10 percent blending in the current year, as the remaining requirements are expected to be allocated in subsequent EOIs,” ISMA added.