Fortnightly Gyan by Indian Sugar Guru, Yatin Wadhwana – Episode 4

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WISHING YOU ALL A VERY HEALTHY AND JOYOUS 2021. MAY THIS YEAR BE KINDER TO HUMANITY.

INDIA CONTRACTS 1.5 MILLION MT FOR EXPORT BUT THE MARKET WANTS MORE
As per some reports, and the view of some people in the know, upto 1.5 million MT of sugar has been contracted for Exports, but given the way the World Market behaved over the past fortnight, it seems that there is still demand for more and the market continues to rally. It seems that the main shortfall is in the first quarter of this year causing the spreads to strengthen and the market to remain in backwardation. On the other hand values in the domestic market continued to remain under pressure due to the large production and cashflow requirements of the Mills.

In India most of the Northern Mills have sold a major portion of the sugar that they wanted to export, they are now only interested in selling their MAEQ Quotas. While the Mills in Maharashtra and Karnataka are keen to Export under their own quota as well as under 3rd Party Exports.

The Trade is faced with 2 major challenges today, first with the continuing rally in the market Mill Performance can become an issue. We have seen this in the past and there has been talk of it in the campaign as well. The second challenge being faced is the availability of containers for Export. With the after effects of the lockdown still impacting the shipping industry finding containers and freight has become a big headache. This situation is likely to continue for at least a another 3-4 months, which is the main window for Indian Exports.

INDIAN CRUSH CONTINUES AT A GOOD PACE, BUT THERE ARE SOME FLAGS BEING RAISED
The Indian Crush continues at a good pace, well ahead of last year, but as I had already mentioned there were reports out of the North flagging lower yields and recovery due to disease (red rot) and water logging. We are now hearing that the yields in Maharashtra may also be impacted due to water logging, and supply of cane to mills may get impacted due to very heavy demand for cane as seed. It will be interesting to see how this pans out in the medium term. Nevertheless all this is not having any impact on Domestic prices for the time being as they tend to remain under pressure due to cash flow requirements of the Mills. Though this could change once the Mills end their crush in the next 8-10 weeks.

Click here to read Episode 1 
Click here to read Episode 2 
Click here to read Episode 3 

Indian Sugar Industry Guru – Mr. Yatin Wadhwana is a strategic consultant and trader with over 35 years of experience. He is Director at Gradient Commercial Pvt. Ltd. which undertakes strategic trades, consultancy and advisory roles. Apart from sugar, he has also been involved in Supply Chain Management, Logistics and the trade of other agri-commodities including wheat, rice and soybean.

To get in touch with Mr.Yatin Wadhwana write on yatinwadhwana@gradient.biz

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