Nod for 1 million tonne sugar export cheers industry
A government decision allowing export of one million tonne sugar and lifting the ban on stockholding limit was cheered by the sugar industry.
By Jayashree Bhosale, ET Bureau | Updated:
PUNE: A government decision allowing export of one million tonne sugar and lifting the ban on stockholding limit was cheered by the sugar industry.
Wholesale prices at the Vashi market went up by Rs 1.50/kg on Wednesday while the commodity for delivery in January gained Rs 17, or 0.58%, to Rs 2,967 per quintal on NCDEX.
“Domestic sugar prices will stabilise now as more sugar will come into the market. Exports will help mills to improve their cash flows and in turn control the cost of production,” said Abinash Verma, director general, Indian Sugar Mills Association. But an exporter from Maharashtra said, “We will get export parity only when domestic prices come down and the fee of buying export quotas from mills declines.”
He said exporters may not have to discount the price due to the volatile movement of the rupee because international prices are already low. Though the current export prices are less than the London prices, a few better-managed mills from Maharashtra have started discussions with international buyers at prices higher than the London price.
London sugar price was at $619/tonne freight-on-board (f.o.b) on Tuesday but mills are getting positive response for offers up to $650/tonne f.o.b.
Brazilian sugar is not available in global markets now and Thai sugar will come in from January onward. With the rupee weakening against the dollar, exporters will get Rs 1,200 more per tonne.
Bigger mills that export their production on their own want the smaller ones to pool their quotas and hand the quantities over to bigger mills. The central government has also lifted quota restrictions and mills are happy that this will improve the lifting of sugar.
“We asked for an extension of domestic sale sugar quota for the last 5-6 months because there was very less lifting of sugar quota. The decision of removing the quota limit will help to improve ex-mill sale,” said a miller from Maharashtra.
Wholesale prices at the Vashi market went up by Rs 1.50/kg on Wednesday while the commodity for delivery in January gained Rs 17, or 0.58%, to Rs 2,967 per quintal on NCDEX.
“Domestic sugar prices will stabilise now as more sugar will come into the market. Exports will help mills to improve their cash flows and in turn control the cost of production,” said Abinash Verma, director general, Indian Sugar Mills Association. But an exporter from Maharashtra said, “We will get export parity only when domestic prices come down and the fee of buying export quotas from mills declines.”
He said exporters may not have to discount the price due to the volatile movement of the rupee because international prices are already low. Though the current export prices are less than the London prices, a few better-managed mills from Maharashtra have started discussions with international buyers at prices higher than the London price.
London sugar price was at $619/tonne freight-on-board (f.o.b) on Tuesday but mills are getting positive response for offers up to $650/tonne f.o.b.
Brazilian sugar is not available in global markets now and Thai sugar will come in from January onward. With the rupee weakening against the dollar, exporters will get Rs 1,200 more per tonne.
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Bigger mills that export their production on their own want the smaller ones to pool their quotas and hand the quantities over to bigger mills. The central government has also lifted quota restrictions and mills are happy that this will improve the lifting of sugar.
“We asked for an extension of domestic sale sugar quota for the last 5-6 months because there was very less lifting of sugar quota. The decision of removing the quota limit will help to improve ex-mill sale,” said a miller from Maharashtra.
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