New Delhi: The government is likely to allow 300,000 tonnes to 500,000 tonnes of unrestricted sugar exports, two government sources said, a move that will push global prices lower.
Agriculture minister Sharad Pawar is scheduled to address a meeting of Indian Sugar Mills Association, a producers’ body, later on Wednesday where he may make the announcement, the sources said.
“If this is the case, I think it’s likely to weigh on prices,” said Ker Chung Yang, investment analyst at Phillip Futures in Singapore.
“India is playing quite a significant role in the cotton market and also sugar. For the past few months, we’ve seen the Indian government trying to control the prices in the domestic market,” he said.
India has already allowed sugar exports to help mills meet an obligation against imports of raw sugar between 2004 and 2008. The government has also permitted exports of imported sugar backed up at ports due to shortage of railway wagons.
But the government has been cautious in allowing unrestricted exports, as sugar is a politically sensitive commodity.
In top-producing state Maharashtra, sugar prices were steady at Rs2,800 ($61.8) per 100 kg, but they could move up when an official announcement comes, traders said.
At 0836 GMT (2:06 pm), London white sugar futures were down 0.65% at $764.4 per tonne, while New York raw sugar futures dropped 1.62% to 30.28 cents per lb.