Indian sugar output up nearly 7 percent, but exports disappoint

Output from October through December reached 11.05 MMT of sugar, up from 10.36 MMT a year ago. According to ISMA, the bump in production is due to early starts for crush in Maharashtra and Karnataka, but the association warns that sugarcane output will be down this season in Maharashtra due to poor rains and pest damage. A new production estimate will be published later in January.

World sugar pricing is still low and stocks high, so India’s exports are expected to be below the government’s earlier expectations despite policies intended to make exporting sugar more attractive. Despite lofty government goals for last season, exports are estimated to have come in below 700,000 MT. According to trade sources, sugar for export is being quoted down about a third from prices in the domestic market. The government is reportedly considering boosting the domestic sugar price floor, which on paper will make exporting sugar less attractive by comparison.

The rupee’s recovery vs. the dollar since October is making Indian sugar more expensive, pressuring exports further. According to Reuters, India’s mills have contracted some 1.4 MMT of exports, with some 650,000 MT shipped already. Trade estimates for total 2018/19 exports range from 2.5 MMT to 3.5 MMT, though currently there is little to suggest that the final figure will approach the top of that range.