How Much Sugar Will India Export in 2021/22?
After good year of weather for farming in the Indian cane regions, we’re expecting a large cane this year and a total sucrose production of around 33m tonnes. We think over 3m tonnes of this production will be allocated to ethanol, meaning 30m tonnes of sugar is produced.
However, Indian consumption should still be well below production, which we have at around 26m tonnes per year. We therefore think there will be at least 4m tonnes available for export from this crop, and there’s the also the possibility of some old crop sugar being sold too.
This year in India, though, the Government’s decided not to implement an export subsidy to help make Indian sugar competitive on the world market. With India’s high domestic price, this means the No.11 price needs to be around 20 c/lb for sales to be made, but with the strength in the market, we’ve seen over 3m tonnes already contracted. However, to see any more, we’d need the price to return to this level to facilitate more sales.
However, inland logistics are a potential limiting factor to the total export volume. We think that there’s only capacity for around 6m tonnes to be exported this season, so we feel that export number should be between 4m and 6m tonnes. Where it lands exactly will depend on how much the market needs the Indian sugar, with the price needing to be supported to 20 c/lb to facilitate sales. However, strong physical premiums in India suggest that physical demand is picking up.
Other Insights That May Be of Interest…
World Sugar Market Five-Year Forecast
