The traders have signed deals to export 300,000 tonnes of raw sugar in the coming season as advantageous market conditions counter the risk of agreeing contracts before India announces its 2022/23 export policy, trade sources said.
The government imposed restrictions on overseas sugar sales for the first time in six years when it capped exports at 11.2 million tonnes 2021/22 marketing year ending Sept. 30 to prevent a surge in domestic prices after mills sold record volumes on the global market.
Exports from India, the world’s biggest producer of sugar, could weigh on global prices but augment supplies across Asia.
“Since global prices and the rupee are in favour, a few trade houses bought raw sugar for November-December shipments,” Rahil Shaikh, managing director of MEIR Commodities India, told Reuters.
Three other sources confirmed the export agreements, declining to be named because of their companies’ policy on talking to the media.
India has yet to finalise export policy for the coming season, but traders are hopeful that exports will be allowed because the country is expected to produce more than 35 million tonnes of sugar during the season while domestic consumption is projected at 27.5 million tonnes.
Indian raw sugar was sold for almost 1 cent above New York’s October contract for shipments in November and December, traders said.
Trade houses are securing supplies in advance of the new season and could ship sugar to Indonesia, Bangladesh and Dubai-based refineries based on pricing, said a Mumbai-based dealer with a global trading house.
“Signing contracts in advance is a bit risky but traders are taking that risk.”
Unlike Brazil, Indian mills mostly produce white sugar, but traders are encouraging mills in top producing Maharashtra state and neighbouring Karnataka to produce raw sugar at the start of the season and contracting that quantity for export, traders said.
Thailand’s new season crop would become available for exports from January onwards and Indian traders are keen to export to Asian countries such as Indonesia and Bangladesh in December quarter, another Mumbai dealer said.