Indian sugar exports rebound as weak rupee, high prices boost demand

Indian sugar mills have resumed exports after a brief slowdown, signing deals for 100,000 metric tons within a week as a fall in the rupee and rising global prices made overseas sales more viable, according to trade sources, Reuters reported.

The renewed activity comes as global sugar prices climb to near a five-month high, supported by rising freight costs and stronger demand. Industry officials said shipments from India, the world’s second-largest sugar producer, will help buyers in Asia and Africa secure supplies at relatively lower prices.

Traders said the recent conflict in the Middle East has pushed up crude oil prices, which in turn is expected to lead major producer Brazil to divert more sugarcane towards ethanol production. This has tightened global sugar availability and lifted prices.

A Mumbai-based dealer told Reuters that export activity had picked up after weeks of inactivity, with about 100,000 tons already contracted and more deals likely in the coming days.

Indian sugar is currently being offered at around $450 per tonne on a free-on-board basis, with countries such as Sri Lanka and African nations including Djibouti, Tanzania and Somalia booking shipments for April and May.

So far, mills have contracted exports of around 550,000 tons in the current season ending September. Industry estimates suggest total exports could reach 1.5 million tons, with demand expected to rise from markets such as Afghanistan, Kazakhstan and Uzbekistan once geopolitical tensions ease.

According to Rahil Shaikh, improved demand and price conditions could support higher exports in the coming months.

India had increased its export quota to 2 million tons in February, but mills applied for only a small portion of the additional allocation, leaving much of it unused.

Traders said logistical challenges, including limited container availability and higher freight rates, are still affecting export volumes. However, Indian sugar remains competitive for regional buyers due to lower shipping costs compared to supplies from Brazil.

The depreciation of the rupee, which has fallen about 4.5 percent so far this year, has further improved export returns, making overseas sales more attractive than domestic markets, dealers added.

Source: https://www.chinimandi.com/indian-sugar-exports-rebound-as-weak-rupee-high-prices-boost-demand/