Export costs have come down by about 3-4% from their peak, after India allowed shipments beginning November 5 following a fall in world sugar futures costs.
Though the present export costs are nonetheless greater than the home market costs by 12-13%, millers are in a wait-and-watch mode as there are nonetheless 5 and a half months left to export the allotted quota.
International sugar futures have barely moved downwards as manufacturing from Brazil is anticipated to be greater than anticipated. Nevertheless, it’s nonetheless not clear if the downward development within the worldwide market will keep for an extended interval, stated merchants from multinational buying and selling homes. That is mirrored within the nonetheless bullish sentiment of Indian export buying and selling.
The Indian authorities in November introduced a quota of 6 million tonnes of sugar for exports. Some provide shortness within the worldwide markets resulted in Indian sugar getting a excessive premium.
As in opposition to the ex-mill worth of Rs 33/kg within the home markets, the export worth for a similar sugar had hit a excessive of Rs 40/kg, greater by 21% over the native costs. Excessive costs had resulted in some sugar millers defaulting on their export contracts signed previous to November at decrease charges.
Presently, exporters are providing Rs 37-39/kg. “Nevertheless, after having seen the worth of Rs 39-40/kg, millers are actually holding on to the remaining quota anticipating to get greater than the final traded worth,” stated a dealer of an MNC export home, who didn’t wish to be named as he’s not allowed to talk to the media.