A Complete Global Sugar Trade Overview

Global Sugar Export Overview and Opportunities

Published On: 15-Mar-2022

India is one of the largest producers of sugar in the world second only to top South American sugar producer and exporter Brazil. Although Brazil’s slump in production has given sugar farmers and exporters in India, an edge in the global market. The Ru-pee’s depreciation has also given a boost to sugar exports as buyers from around the world can obtain a higher quantity of the commodity for the same outlay.

Sugar producers’ independence from imported goods makes it a prime commodity that export houses must turn their attention to. The primary challenge to the com-modity comes from the global crude oil price hike and geopolitical factors emanating from the crisis in Ukraine. The All India Sugar Trade Association (AISTA) recently re-ported that Indian sugar mills have exported 30.68 Lakh Tonne from October until the end of January 2022. Sugar exports are measured between the marketing year begin-ning in October and ending in September.

India’s Sugar is a Prime Commodity

Indian sugar has been able to gather a premium on global prices. While international sugar rates hover around 18 cents a pound, Indian mills have obtained a price of about 19.5-20 cents a pound. The chief producers of Sugar in India are the states of Uttar Pradesh, Maharashtra, Karnataka and Tamil Nadu.

In recent days, Indian sugar mills have been contracted by global buyers to export 5.5 Lakh tonnes. The surge in exports will help Indian farmers and traders reduce their massive stockpiles and cut down on warehousing costs. The most encouraging aspect of the development comes from government-guaranteed support prices to farmers, thereby increasing farm incomes.

The Indian government has actively provided subsidies and other help to increase In-dian sugar’s share in the global output. Although the subsidies have long stopped com-ing after the WTO ruled that India’s price assistance and domestic support measures contravene international trade guidelines. The dispute had been taken up by Brazil, Guatemala and Australia. Indian officials cried foul at the WTO appellate court’s findings. Nonetheless, the ensuing situation has resulted in Indian exports doing well on the global market without any subsidies. Last year, with the help of subsidies, India exported about 7.2 million tonnes of sugar. While this year, India is poised to export a record 7.5-8 million tonnes without any government assistance. An Indian appeal to the WTO ruling lays tabled in Geneva as WTO waits to sort out its operational issues. 

Sugar: The Way Forward

In the previous weeks, most sugar exports have been sent to the countries of Indone-sia and Bangladesh. The two are Muslim majority nations looking to plug the in-creased domestic demand during the upcoming holy month of Ramadan. Local prices in India have remained stable even after record production as export volume has ab-sorbed most of the increased production volume.

At a time when global uncertainties plague the export and import community, the sugar boom is a sigh of relief for the Indian government already struggling with a de-preciating Rupee. Recently, Prime Minister Narendra Modi issued an invocation to In-dian wheat exporters to tap into the opportunity that global markets present. A simi-lar appeal to Indian sugar exporters will be just as appreciated.

Cybex Exim Solutions provides Growth Consultancy Services to firms across the world looking to enter new markets or develop dependable buyer-supplier networks. Con-tact us now at [email protected] or call(+911204517800) or WhatsApp(+9971093718) to get started.