Mumbai: Sugar exporters in India, the world’s second biggest producer of the sweetener, are delaying signing new contracts after domestic prices last month climbed the most in at least three years amid forecasts for a lower crop.
Wholesale prices in July rose 16% at Vashi, a Mumbai suburb and the country’s biggest sugar market, to Rs17,160 a tonne, matching levels on London’s Liffe exchange.
“Domestic prices have caught up with global rates and there are signs of it rising further,” Narendra Murkumbi, managing director of Shree Renuka Sugars Ltd, India’s biggest refiner, said on Monday. “Nobody in India is willing to enter into forward contracts for exports.”
India’s production may drop 25% in the year starting October to 20 million tonnes as farmers reduced the area planted under sugar cane because of insufficient rainfall, Vinay Kumar, MD of the National Federation of Cooperative Sugar Factories Ltd, had said on 15 July.