Mumbai: Sugar mills in Maharashtra, the nation’s second biggest cane grower, have contracted to export 1.03 million tonnes (mt) since January to run down stockpiles after production reached a record.
The quantity is two-thirds the tonnage mills across India have committed to ship by December, said Prakash Naiknavare, managing director of the Maharashtra State Cooperative Sugar Factories Federation Ltd, a grouping of cane farmers.
Indian mills are under pressure to export as record sugar cane output has caused domestic prices to fall by more than a quarter in the past six months.
An increase in shipments from the South Asian nation may add to a global surplus estimated by ED&F Man Holdings Ltd to reach 9.8mt this year.
Producers signed contracts to sell 100,000 tonnes in the past week at $257 (Rs10,500) a tonne, Naiknavare said in Mumbai. The price excludes freight charges to the port.
“Export sales have exceeded our expectation,” he said. “There is still good demand for our sugar.”
White, or refined, sugar prices in London declined 30% in the past year as farmers in Brazil and India, the two largest producers, prepare to harvest record crops.
Brazil will have a surplus of 20.4mt, while India’s will be 5.5mt, according to ED&F Man, the world’s biggest trader of the sweetener.
Sugar output in Maharashtra reached a record 9.2mt between 1 October and 19 June, up 77% from a year ago, according to the National Federation of Cooperative Sugar Factories Ltd. That prompted the state government to offer mills an export subsidy of Rs2,350 a tonne to help lower inventories.