Indian exports lead to a decline in sugar prices, according to hEDGEpoint analysis

Regulation & Compliances
Market & Price Trends
Published Apr 17, 2024

Tridge summary

The Indian Sugar Mills Association (ISMA) and the Pakistan Sugar Mills Association have requested their governments to allow sugar export quotas due to surpluses, with India projecting a 9 Mt stockpile by September 2024 and seeking a 1 Mt export allowance, and Pakistan expecting a surplus of at least 1.5 Mt and being granted permission to export 750kt. These developments have slightly decreased raw sugar prices, with the market awaiting further government decisions. The potential exports from India and Pakistan could impact global sugar prices and trade flows, especially considering the upcoming Brazilian sugarcane harvest and recent beneficial rainfall in Brazil's sugarcane regions, which supports a positive outlook for sugarcane growth.
Disclaimer: The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

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 ethanol program. Sugar prices underwent corrections after the Indian Sugar Mills Association's (ISMA) request for ...
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