Facing a rebound in domestic sugar production this season, India’s central government announced that it will lift the 20 percent duty that had covered all sugar exports. The move is likely motivated by a desire to lower domestic stocks and support the domestic sugar price, hopefully preventing mill debts to cane growers from growing further. By some estimates, the average cost of production for many mills is about 10 or 15 percent higher than the domestic price (ex-mill). This is all a reversal of conditions last season, which saw the central government scrambling to ensure enough supply was available and control high sugar prices. Coming into this season, the government took steps to maximize production, encouraging early starts to crush campaigns in key states.
ISMA’s most recent estimate pegs 2017/18 production at 29.504 MMT, let by Uttar Pradesh and Maharashtra, which are each expected to beat the 10.0 MMT mark. Through Mar. 15, total output is reported at 25.8 MMT.
Exports through January were already reported at 2.9 MMT. The duty on imported sugar remains at 100 percent.
Sugar production history, select origins, Asia
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