Sugar falls as monthly quota rises
PUNE: Increase in monthly sugar release quota of the country by over 14per cent to 20 lakh tonnes for September has led to a 2per cent fall in sugar prices.
Exporters expect millers, who have been sitting on huge sugar stocks, to begin exporting the sweetener as price margin between domestic and export prices reduces slightly.
Sugar mills, which have exported sugar under Minimum Indicative Export Quota (MIEQ), allocated either directly or by way of trading export quota to third parties may sell additional quantity of sugar equivalent to actual export during 2017-18 sugar season till August 2018 or their MIEQ, whichever is less, excluding the additional quantity of sugar already sold in August 2018 on this account.
This is in addition to the quantity of white/ refined sugar specified for domestic sale. Lower monthly sugar release quota by the government for past three months, coupled with minimum selling price (MSP) of Rupee29/kg ex-mill, had kept domestic prices high at Rupee30/kg to Rupee32/kg. This, along with the talk in the industry about increasing MSP to Rupee36/kg, had discouraged millers from exporting sugar at a loss.
Including the benefit of Rupee55/tonne for paying sugarcane price to farmers, the export realisation for sugar mills is about Rupee27/kg. While industry expects an increase of 10per cent in sugar production during 2018-19 season, export is the only option for the industry to deal with the record surplus sugar.
Exporters expect millers, who have been sitting on huge sugar stocks, to begin exporting the sweetener as price margin between domestic and export prices reduces slightly.
Sugar mills, which have exported sugar under Minimum Indicative Export Quota (MIEQ), allocated either directly or by way of trading export quota to third parties may sell additional quantity of sugar equivalent to actual export during 2017-18 sugar season till August 2018 or their MIEQ, whichever is less, excluding the additional quantity of sugar already sold in August 2018 on this account.
This is in addition to the quantity of white/ refined sugar specified for domestic sale. Lower monthly sugar release quota by the government for past three months, coupled with minimum selling price (MSP) of Rupee29/kg ex-mill, had kept domestic prices high at Rupee30/kg to Rupee32/kg. This, along with the talk in the industry about increasing MSP to Rupee36/kg, had discouraged millers from exporting sugar at a loss.
Including the benefit of Rupee55/tonne for paying sugarcane price to farmers, the export realisation for sugar mills is about Rupee27/kg. While industry expects an increase of 10per cent in sugar production during 2018-19 season, export is the only option for the industry to deal with the record surplus sugar.