During the current Sugar Season with the production estimates continuously being revised upwards, and the prospects of the growing surplus, has caused the Govt., Sugar industry and all the stakeholders in the value chain to apply their minds to resolving the problem of plenty. The bumper production resulted in reducing global prices & weakening of domestic prices too. Sugar prices have dropped a whopping 18% – 20% since the beginning of the current crop in October 2017. Surplus production of sugar during the current sugar season had resulted in depressed sugar prices which have adversely affected the realization by the sugar mills from sale of sugar in the open market. Low realization from sale of sugar in the country during 2017-18 sugar season resulted in accumulation of cane price arrears. The domestic market has been facing a huge surplus. Sugar traders have been offering lower prices to reduce inventory. Even mills have reduced their offer prices on expectations of a further increase in their output. Sugar mills have been constantly under pressure to sell their inventory to clear cane dues.
In order to alleviate the glut of sugar, the Central government had directed the sugar mills to export up to 2 million MTs of sugar till September 2018 under the Minimum Indicative Export Quota (MIEQ) policy as was done during 2015-16 sugar season in order to channelize some sugar out of the country. However, not many mills in the country’s largest sugar producing state were enthused about exports. With the Global Prices of sugar at 2 ½ year lows, exports have not been viable. Whereas, the government seems to be in a wait-and-watch mode at least for the time being, under the assumption that prices will automatically firm up with the exports, negating the need for provision of incentives.
The glut has soft-impacted sugar mills’ profitability, even as operating costs shoot up thanks to multiple revisions of sugarcane support prices by the government. Sugarcane is a thirsty crop that sucks the water table dry and the need of the hour is to reduce its farming. No government, however, is ready to bite the bullet on this one. To check the continuous fall in prices of sugar and stabilize the sugar prices with a view to clear cane price arrears of farmers, the Government also took measures like fixing minimum selling price for sale of sugar at factory gate @ Rs 29 per kg; imposition of stock holding limits on sugar mills and creation of buffer stock of 30 LMT. Sugar stockpiles are poised for a record as slowing demand growth and surging production creates the worst-performing commodity of 2018. Consumers have become increasingly wary of the health impact of their sweet tooth, and companies from canned-fruit maker snack-food sellers are touting products made with less sugar.
While global consumption is still rising, the pace of growth has slowed to an average 1.4 per cent in recent seasons, down from 1.7 per cent over the past decade. That’s coming at a time when production is booming, especially in India, the world’s No. 2 producer.
Currently the neck of the sugar trade is strangled with several breath taking problems which has ultimately resulted stagnancy in the market. This would play a major role in making the upcoming crushing season turn bitter. The matter of fact remains that unless and until smooth channels in the global market are diversified for Indian Sugar Industry, the entire channel is likely to suffer in the same drowning boat.
The need of the hour is to congregate for explicit discussions to survive in the domestic & global market.Knowing that data is the key to decision making, but information alone isn’t informative: it can be interpreted in many ways and inform drastically different decisions. Various panel discussions, conclaves & conferences happen worldwide. Conferences are the tunnels to gain a better understanding of what’s happening in the industry, they also act as catalysts for change. Valuable discussions rising at conferences often lead to the brightest solution required. A conference happening in Delhi is one of its kinds welcoming all the stake holders of the sugar industry with global participation.
While talking to Mr.Kiran Wadhwana, he shared that 2018-19 marks a significant year for global sugar markets on the basis of trade structures/global import- export policies & government subsidies too. The ongoing variations in sugar consumption patterns are leading to a shake-up for the industry.
The highlights of the event are Export insights from India: The effect on neighboring nations, Forecast market movements despite the flux in prices – hear what the global trade has to say, How to make production costs a competitive driver when prices are tight, Differentiating you and adding value for institutional customers, The potential growth opportunities in ethanol for India and the rest of the world, Tracking the sun -examine weather forecasts and how the last few years have impacted yield and production volumes.
The Key speakers include;Jose Orive, Executive Director, ISO (International Sugar Organization), Danielle Morley, CEO, Bonsucro, Geraldine Kutas, Head of International Affairs, UNICA, Bertrand Bosc, Global Head of Sugar Engelhart Commodities Trading Partners , Kona Haque, Head of Group Research EDF & Man, Luca Meierhofer, Trading Manager, Louis Dreyfus Company, Yatin Wadhwana, Managing Director – Sucden India Pvt. Ltd, Vikram Tole, Head -Indian Subcontinent, Alvean India Private Limited and many others from the Sugar fraternity
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S&P Global Platts in association with India Sugar Mills Association (ISMA) presents the 9th Annual Kingsman Asia Sugar Conference happening on the 5th & 6th Day of September 2018 at the Leela Ambience, Gurgaon.
If you’re looking to get up to speed on the latest trends, market insights, lubrication with the new government policies in the industry, hear inspiring keynotes from thought leaders, or rub elbows with other professionals, 9th Annual Kingsman Asia Sugar Conference is the place to be present. For Registration/Information : 90 5511 5511