Sugar exports halts
Aadhira Anand | The Dollar Business
The sugar exports in India has halted as the dealers have refused to sign new contracts in the past five days. The decision to not sign the contracts was taken, when local prices saw a raise though there were expectations of a lower output, confirmed the trade sources on Tuesday.
India has contracted to export 1.6 million tons of sugar since October 1st and has already exported 1.3 million tons so far. India is the world’s largest producer of sugar after Brazil.
Mohammed Rafique, owner of Samba Impex said that, “the rise in prices and the expected low output has stalled the export of the product. Climatic condition is one of the reasons for the expected low output. Due to high prices we also find ourselves in situations where we cannot compete with international prices.”
He also added, “another issue that is the reason for the price rise is artificial inflation. The dealers stock the goods for future usage, with the thought of selling them in the future. This leads to price rise in the current situation.”
There has been an 8% increase in the domestic prices in the last 10 days. This surge happened after India has cut down its output estimate by 1.4%. It is expected that the output is seen to fall this season after the surplus production of straight six years. As much as India is the world’s large producer of sugar, it is also a larger consumer of the same.
Rafique also added that, “sugar prices can be controlled only when government interferes in it. There should be strict laws passed for artificial inflation and different policies should be brought into action for controlling the prices.”
However, a point to be taken into consideration is that the government had convinced the sugar mill owners to agree to export a target of 3.2 million tons of sugar in the year 2015-16.
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