NEW DELHI: A weak rupee and Ramzandemand have boosted sugar exports at a time when the freeing up of state controls have led to a rise in supplies and a fall in prices. Mills have committed around 1.5 lakh tonne of sugar for export to neighbouring countries. Thanks to a good demand from West Asian countries due to the ongoing month of Ramzan, Indian traders are offering sugar in the international market in the range of $500 per tonne. Last month, around 69,000 tonne of sugar was exported by India.
With the rupee depreciating to around 60 against the dollar, traders have committed huge amounts of sugar for exports, said a trader. Exports in the 2012-13 sugar season have touched 7 lakh tonne till now. Around 34 lakh tonne sugar was exported in 2011-12. During 2010-11, exports were around 26 lakh tonne.
Analysts however are calling it a fleeting trend because Brazil is exporting huge amounts the world over. Global prices have crashed due to over-supply from the world's largest sugar producer. Similar to the devaluation of the Indian rupee, Brazilian currency real has also crashed. "The Indian exchange rate is similar to the Brazil rate currently. Huge amounts of sugar coming from Brazil have pushed down US futures prices from 17 cents/lb last month to 16.38/lb currently," said the trader.
Another expert said that although the price offered by the sellers is around $500 per tonne, there are few buyers at this price. "The final selling price of raw sugar is around $475-$450 per tonne and this means a $25 per tonne loss for traders. Similarly, refined sugar's sale price is around $465 per tonne," said a market expert. "At an ex-mill price of Rs 28 per kg, the export price works out to be Rs 27 per kg. But no one will sell at a loss. When the rupee depreciated, 1.5 lakh tonne of sugar was sold. But since then, there has been no export parity," said the trader.
Sugar production this season (October 2012-September 2013) is expected to reach 24.5 million tonne, higher than the domestic demand of 22 million tonne. A similar trend is anticipated next year, with acreage and production expected to increase with the advent of a good monsoon.
Major sugar importers from India are the neighbouring countries, East African countries likeSudan and Somalia and West Asian countries.