Fortnightly Gyan by Indian Sugar Guru, Yatin Wadhwana – Episode 8

Yet another long break since the last episode. The intervening period has seen the resurgence of the Pandemic across the country. We have all got affected with losing a family member, friend or colleague. Here is wishing all my readers a healthy and safe time ahead.

With most of the Mills winding down their operations for the current crush the final sugar production will be about 30.7 to 30.8 million MT taking into account the Special Season crush of Karnataka and Tamil Nadu.

The reports from most of the growing areas are suggesting that there has been an increase in area under cane mainly on the back of decent availability of water in the storage facilities. This combined with a normal Monsoon predicted for 2021, the sugar production for 2021-22 looks to be higher than the current crop.

After turning bearish in early-April, the world market once again turned mildly bullish on the back of macro-events like bullish Crude Oil price and general steady tone in other agri-commodities on the back of a return to normalcy in the World Economy. There was also an underlying concern about the below normal rains in Brazil feeding the sentiment. Going forward the main concerns for the market will still remain Brazilian weather and the fact that the Brazilian Millers are well priced for the current crop meaning that any fresh buying that comes from the consumers will drive the prices higher. However, for the moment the market seems to be stuck in a range of 16.50 to 18.00 cents basis NY.

Exports have continued at a fairly quick pace touching about 4.8 million MT starting from 1st Oct. 2020 until early May 2021. About 5.70 million MT have been committed against the MAEQ of crop 2021 leaving about 300kMT being impacted by the lower incentive of Rs 4,000 PMT announced on 20th May 2021. The reasoning behind reducing the incentive at this late stage in the export campaign defeats logic, as the saving is minor versus the confusion that it has created. Nevertheless, it is a pointer to the likely incentive to be provided for the exports during the next season.

In the absence of Exports quotas, some mills in Maharashtra and Karnataka have sold sugar under Open General License (OGL) for export, thereby forgoing any incentive from the Govt. This decision seems to stem from the fact that with a large production this year the Mills are sitting on big stocks and are keen to liquidate their sugar before the start of the Monsoon and the new crop.

Given the pace of exports and the door being opened for OGL exports, the total exports from India during the 2020-21 crop could exceed 6.5 million MT. 

Click here to Read Episode 1
Click here to Read Episode 2
Click here to Read Episode 3
Click here to Read Episode 4
Click here to Read Episode 5
Click here to Read Episode 6
Click here to Read Episode 7

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


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