Exports lead to a decline in sugar prices in India and Pakistan; Check out hEDGEpoint analysis

The Indian Sugar Mills Association's (ISMA) request for an export quota led to a correction in sugar prices. The agency's projected production for India in 23/24 is 34 Mt, with 32 Mt available after ethanol diversion. ISMA emphasized that sugar stocks could reach almost 9 Mt by September 30, 2024. They asked for an export allowance of 1 Mt for 23/24 due also to the positive outlook for 24/25. The Pakistan Sugar Mills Association added to the bearish trend brought about by ISMA by advocating the granting of export quotas by the government. Pakistan expects a surplus of at least 1.5 Mt, which reduces sugar mills' margins. The price of raw sugar reacted to these export orders, retreating from the 22.7c/lb level. The market is cautious as governments have not yet responded. Allowing both quotas in the 23/24 season would have a strong downward impact on prices, but note, allowing exports from India would reverse efforts to stabilize domestic prices, including restrictions on the ...