India mills renegotiate, default on sugar export deals to catch rising prices, say dealers

MUMBAI (Nov 15): Indian sugar mills have been renegotiating and defaulting on contracts to supply 400,000 tonnes of the sweetener to overseas buyers, as prices jumped after the government cut this year’s export quota, five dealers told Reuters. The renegotiations and defaults by mills in India, the world’s second biggest sugar exporter, could support global prices. Mills started selling sugar to trade houses in late August and signed deals to supply around two million tonnes of sugar for export, even before New Delhi approved an export quota of six million tonnes earlier this month. “A few weak mills that signed deals in advance are not honouring the contracts. They are threatening to default unless buyers are ready to renegotiate at higher prices,” said a Mumbai-based dealer with a global trade house. Four other sources confirmed the export agreements were renegotiated or defaulted on, declining to be named because of their companies’ policy on talking to the media. Two months ...