Golden opportunity for Indian mills to export sugar to Indonesia

Pune: Indian sugar exporters are likely to get benefit from Indonesia which is planning to tweak its sugar import norms. According to the reports, Indonesia is mulling to amend its quality norms to enable import of Indian raw sugar.

Indonesia generally imports sugar having International Commission for Uniform Methods of Sugar Analysis (ICUMSA) level of 1,200 or more. Even the finest of Indian raw sugar does not meet this criteria. As per reports, Indonesia is likely to reduce the level to 500 to 600 ICUMSA.

A new opportunity is standing in front of Indian mills as Indonesia needs around 35 lakh tonnes of raw sugar.

Indonesia usually imports sugar from Thailand which has higher ICUMSA. Thailand is unable to meet its domestic need due to drought. Brazil has yet not commenced its season, therefore now Indonesia may move to India to fulfil its domestic need.

To reduce the sugar surplus, the government announced 60 lakh tonnes of sugar export subsidy for 2019-20 sugar season. The policy involves an export subsidy of Rs 10,448 per metric tonne (mt) to sugar mills. The total estimated expenditure government will bear Rs 6,268 crore.

As per market reports, about 16 lakh tonnes of sugar have been exported from India and about 32 lakh tonnes of contracts have been signed for exports. Experts in international trade claim there is an estimated deficit of 8 to 9 million tones in 2019-20 Sugar Season in the global market and that Thailand’s exports are likely to be down by 3-4 mn tonnes due to lower production therein.

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