India, the world’s second-largest sugar producer after Brazil, has announced plans to export 1 million metric tonnes of sugar as per a news report. This decision is seen as a step to manage domestic stock surpluses and support local sugar prices.
India’s export of sugar often has global implications due to its significant production and export volumes. The decision to allow exports this year could influence global sugar prices, which are already under pressure. Notably, this move comes after India restricted sugar exports in 2023-24, which tightened global supply chains.
Maharashtra, Karnataka, and Uttar Pradesh, which together contribute over 80% of India’s sugar production, have witnessed lower sugarcane yields this year. As a result, production estimates for the current 2024-25 season have dropped to approximately 27 million tonnes, significantly below the 32 million tonnes produced in the previous year and the annual consumption figure of 29 million tonnes.
Domestic sugar prices in India have been at their lowest levels in over a year. The Indian Sugar and Bio-energy Manufacturers Association highlighted that the export approval provides much-needed relief to mills struggling with low prices. The measure is also expected to offer a reprieve to producers as they prepare for stronger yields next year.
India exports sugar primarily to countries like Indonesia, Bangladesh, and the UAE. On average, the nation exports around 6.8 million tonnes annually. The export quota of 1 million tonnes this year, though limited compared to historical figures, marks a critical shift given last year’s complete ban on exports.
The announcement had an immediate impact on sugar stocks. Companies like KCP Sugar, Bajaj Hindusthan, Dalmia Bharat Sugar, and Shree Renuka Sugars saw their share prices rise by 2.92% to 3.75% as of 10:40 AM on January 20, 2025.
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Published on: Jan 20, 2025, 2:27 PM IST
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