India set to allow mills to export around 1 million tonnes of sugar

India is set to allow mills to export around 1 million tonnes of sugar, mostly unrefined, after allowing companies’ requests to let them ship out stocks that had piled up in ports and warehouses, government and trade sources said on Thursday.

Logistics problems, such as a shortage of railway wagons, have prevented mills from shipping raws, or unrefined sugar, which mounted up after New Delhi in May capped this season’s exports at 10 million tonnes to prevent a surge in domestic prices.

“There’s a surplus in the country, and as we know, raw sugar stocks are meant for the export market, so it makes sense to allow them to be exported,” a government source, who asked not to be named in line with official rules, said.

Four sources, two from the government and two from trade, said the permission was expected to be granted very soon, without giving a precise time.

Reuters last month reported that India was considering allowing raw sugar shipments.

The permission for India, the world’s biggest sugar exporter after Brazil, to sell around 1 million tonnes could further weigh down benchmark prices in New York SBc1 that hit a one-year low on Wednesday.

Indian mills produce raw sugar only for overseas refineries that turn raws into whites.

Trade, industry and government officials say India’s record 10 million tonnes of sugar exports this year, included about 4.5 million tonnes of raw sugar, while the rest was white, or refined.

Over the last few years, India has been exporting reasonably large quantities of raw sugar, positioning it as a consistent supplier beside major players Brazil and Thailand.
India could produce 35.5 million tonnes of sugar in the new season starting from Oct. 1, compared to 36 million tonnes in the current season.
Source: Reuters (Reporting by Mayank Bhardwaj and Rajendra Jadhav; editing by Barbara Lewis)