| Date: |
14-03-2015 |
| Subject: |
Indian sugar exports likely to halve this year, face tough fight from Brazilian prices |
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PUNE: As the crushing season approaches its fag-end, Indian sugar exporters have reduced the expected raw sugar exports by half as they find it difficult to compete with the Brazilian costs. Instead of nine-10 lakh tonne raw sugar export expected a couple of months back, exporters now feel India can ship out a maximum of three-five lakh tonne only, since there are no takers.
As the government's announcement of subsidy of Rs 4,000 per tonne for an export of 1.4 million tonne raw sugar came late, leading industry players were expecting the country to produce about nine-10 lakh tonne raw sugar. However, most MNCs and Indian export houses told ET that this may not be feasible any longer.
"There are no buyers. The sentiments are down," said Karan Amin, regional head, Emmsons International. Brazil's raw sugar is available at $310-$312 a tonne, while Indian raw is priced at $345 a tonne. With plunging crude prices, Brazil has been able to slash freight costs drastically when compared to Indian freight costs.
As a result, imported Brazilian raw sugar is cheaper by Rs 3,000 a tonne than the locally manufactured raw sugar. Exporters say almost 50% or even more raw sugar to be dis patched from India would be through indirect route, which means through consumption by the Indian refineries.
"We are now trying to give reasons like depreciation of Brazilian currency and a few others. But the fact has been that there are no buyers in the international market," said a high level official of a leading MNC trade house. Another MNC trade house MD , requesting anonymity, said mills are not ready to give sugar below Rs 19 per kg, making it difficult to compete with Brazil.
"There would be demand for our sugar once the Brazilian stocks reduce," he said.Lesser exports and the fact that India is set to record a fifth consecutive year of surplus sugar production is mounting pressure on the supply side.
Source : economictimes.indiatimes.com
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