The chairman of commodities consultant LMC International, James Fry, said due to depressed global sugar prices, sugar mills in India are struggling to export surplus sugar even after a subsidy announced by the Indian government. To reduce the sugar surplus, the government last month announced 60 lakh 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 6268 crore.
Global prices fell to their lowest level in a year earlier this month, and weaker exports from India could support global prices.
Addressing a conference, LMC International’s James Fry said, “To make exports attractive New York raw sugar prices need to be above 13 cents per lb.”
“As prices witness hike and India commences to become a possible exporter, that is the price where Brazil starts switching more back into sugar. There is a kind of equilibrium,” Fry quoted by the news agency.
Speaking about the current scenario, The falling prices of sugar in the international market has helped Brazil to emphasise more on ethanol production. The excess production of sugar kept the prices low, and the mills turned back to their favourite ethanol production as the gasoline prices have increased. It is expected that the mills will allocate more sugarcane towards ethanol output because of its huge demand.
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