Sugar exports from India may double as farmers prepare to harvest the third-biggest crop ever, extending the country’s surplus for a sixth year.
Shipments will be 2 million metric tons in the 12 months starting 1 October, according to the median of six estimates from refiners, brokers and analysts compiled by Bloomberg. That compares with 700,000 tons to 800,000 tons this year, the Indian Sugar Mills Association says. Production will be 27.25 million tons from a record 28.4 million tons this year, estimates from eight survey participants show.
The glut in the world’s second-largest producer threatens to extend a 35 per cent slump in New York futures in the past year. The decline in prices to the lowest since 2009 has forced the government to subsidize exports and waive interest on bank loans to processors. Stockpiles of 10 million tons will add to supplies and exceed demand of 25.5 million tons, the mills say. That may force producers to ship as much as possible.
Domestic prices have fallen below the cost of production to a seven-year low because of weak demand and mounting stockpiles, according to the mills. The cabinet approved interest-free loans of 60 billion rupees ($943 million) this month to help mills clear 210 billion rupees owed to farmers. The government has pledged a subsidy of 4,000 rupees a ton for raw sugar exports as domestic rates are above global prices.
Bloomberg News, edited by ESM