As the global prices of sugar are rising, the Indian sugar mills have initiated signing export contracts. The process was geared up after government approved export subsidy for sugar. The global prices of sugar have hit at highest level in 3-1/2 years, said industry sources.
Exporting sugar will help India to reduce its sugar stock and support domestic prices which are falling due to excess supply.
The shipment could however reduce the rally in benchmark prices in New York and London.
The sugar mills have signed contracts to export 1.5 million tonnes of sugar to Indonesia, Sri Lanka, Afghanistan and African countries from January to March, informed officials.
Rahil Shaikh, managing director, MEIR Commodities India said, “Export contracts are signed for raw sugar most of which is exported to Indonesia.”
Indonesia generally imports sugar from Thailand and has begun buying sugar from India after it changed purity regulations for sugar imports.
Of 1.5 million tonnes sugar to be exported, 1 million tonne sugar will be raw sugar and rest white sugar.
The shortage of containers is limiting the demand of white sugar from Sri Lanka, African countries and Afghanistan.