Indian sugar exports to benefit as shortage grows in global market
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Mumbai: The Indian sugar market may be the solution to a global shortage of sugar that is now in demand as countries open up and reduce restrictions after the onset of the Covid-19 pandemic. Exporters in India have been eying big deals as one of its largest competitors - Brazil - has faced droughts and frost which has made it wind down harvest early.
Sugar prices are near their highest since early 2017. The shortage of sugar independent countries has also been caused by over-reliance on available stocks, due to reluctance to pay higher prices. Indian sugar exporters will now step in to provide sugar at these higher prices.
Previously, the Indian sugar market had been seen as a threat to competitors due to large subsidies. The WTO had taken up this issue during the country's trade policy review (TPR) earlier this year, with members such as Canada, the US and Australia complaining that New Delhi has not declared its Agri export subsidies for more than eight years, while Brazil held that India's longstanding support measures for sugar have suppressed global prices by up to 25%.
Now, the rise in prices means that India can withdraw export subsidies as exporters can sell at a profit on the global market. The move was announced in August by food secretary Sudhanshu Pandey. According to the Indian Sugar Mills Association, as per port information and market sources, about 66.70 lakh tons of sugar has been physically exported out of the country in the first 11 months of the sugar season (1 October 2020 to 31 August 2021) period. This is almost 11 lakh tons more than the 55.78 lakh tons exported during the corresponding period last season.