India to divert 350,000 tonnes of sugar exports to local market amid shortage
Indian refiners will divert 350,000 tons of sugar offshore to the domestic market. This move aims to ease a significant supply crunch and tame surging prices. Authorities have cleared the release of these stockpiles to domestic buyers within a week. This intervention will provide near-term relief for consumers during the festival season. Sugar prices have already begun to cool down following…
Indian sugar refiners will redirect 350,000 tons of sugar intended for export to domestic markets, according to sources familiar with the situation. The authorities have approved this move to address a supply shortage. The processed sugar could be made available to local consumers within a week, which would be sufficient to meet the country's total demand for nearly five days.
This measure aims to alleviate the soaring prices, which reached a record high last week. India, the world's second-largest sugar producer, is currently grappling with a shortage of the sweetener, due to a smaller-than-expected crop this year caused by irregular rainfall and diseases in major growing regions.
Under the revised rules, authorities have permitted 1 million tons of duty-free imports and also allowed processors to sell some refined sugar intended for export locally. The release of these stocks will provide immediate relief without the need for imports, say the sources. While inbound shipments will still be required later, they will help reduce domestic prices until the arrival of sugar from Brazil.
Average Indian ex-mill sugar prices peaked at 67 rupees ($0.70) per kilogram last week, but have since dropped to between 54 and 55 rupees following the government's announcement of duty-free imports on August 20.
India's sugar demand typically peaks during the festival season, which begins in late August and continues until January, as people consume more traditional sweets and processed foods. The government's decision to allow imports has put upward pressure on global prices, although this has eased in recent days due to the expectation that India won't need as much as anticipated.
Duty-free sugar imports may reach between 300,000 and 600,000 tons by the end of October, according to estimates from traders, analysts, and millers. These estimates are lower than the 1 million-ton quota approved by the government, as the declining domestic prices reduce the incentive for mills and refiners to increase shipments.
Indian sugar refiners are permitted to import duty-free raw sugar if it is subsequently exported after processing under tolling arrangements.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
