New Delhi: India is not in a hurry to allow additional sugar exports, union minister of state for food consumer affairs and public distribution K.V. Thomas said on Tuesday, responding to a demand made by an industry body to allow half a million tonnes more for overseas sales to cash in on high global prices.
On Monday, a leading industry body had sought permission from the government for an extra 500,000 tonnes of sugar exports in the current year.
India, the world’s top sugar consumer and biggest producer after Brazil, has permitted exports of 1 million tonnes of sugar this year under the open general licence scheme to support local prices that fell below production cost as supplies exceeded demand — shedding around 5% since January.
“We are not in a hurry at all as global prices are likely to remain steady until January,” Thomas said.
He said the government might consider allowing more sugar exports after September when the current 2010/11 year comes to an end.
Delay in extra supplies from India may push up New York sugar futures that hit a five-month high on Monday due to lower supply prospects from top exporter Brazil.
“Let us wait until September and then take a call,” Thomas said, adding the government would ensure local supplies to meet seasonal demand.
India’s festival season starts with the holy Muslim month of Ramadan in August and ends with Diwali, the Hindu festival of light in October.
“We are looking at carryover stocks of 5.9-6.1 million tonnes,” Thomas said. Mills had a carryover of 5.0 million tonnes at the beginning of the 2010/11 season.
India is expected to produce over 24 million tonnes of sugar this year, up from 18.9 million tonnes in the previous year. Its annual consumption is around 22 million tonnes.
Analysts say the government will wait and watch.
“The government would assess how the cane planting shapes up once the rainy season gets over,” said Prasoon Mathur, senior analyst at Religare Commodities.
As on 20 July, cane acreage stood at 5.16 million hectares against 4.9 million hectares a year ago, farm ministry data showed last Friday.
Farmers start planting cane in the rainy months of June and July.