Sugar rates have declined by almost $50 per tonne in international markets for the very first time in two months, and this could effect the Indian sugar sector, business people today stated.
On Thursday, world marketplace rates of refined sugar have been $423 per tonne, although crude sugar was trading at 17 cents per pound. On June 8, the price tag of refined sugar was $467. The price tag of crude sugar then was 17.80 cents per pound.
The sugar business had predicted that production would decline this year due to the drought in Brazil. Sugar rates in international markets have been increasing for the previous couple of months as the demand for ethanol was anticipated to enhance and Brazil’s shift towards more ethanol will also have an effect on sugar production, business people today stated.
“The supply of sugar from Brazil to the world market was declining due to the stagnant growth of sugarcane owing to lack of rains. But in the first week of June, Brazil received an average of 15-20 mm of rain. This saved the damaged sugarcane,” Abhijit Ghorpade, a sugar exporter, stated.
The sugar season in India has just concluded and about 35 lakh tonne extra sugar has been created compared with last year. Sugar export agreements are in complete swing. Prices in worldwide markets have come down in anticipation of surplus sugar from India getting into the international marketplace, Mukesh Kuvediya, basic secretary, Bombay Sugar Merchants, stated.
With the possibility of rains, more than 3 million tonne of sugar is anticipated to enter the marketplace, traders stated. Currently, up to 35% of the sugar season is more than in Brazil. Kuvediya stated it would be tough to predict the state of sugar in the world marketplace till the sugar season reaches 70% and the monsoon season plays out fully.
India, nonetheless, is probably to export an additional 5-6 lakh tonne below the open basic licence, he stated. Sri Lanka has banned sugar imports due to excess stocks and so there is not a great deal scope there, he explained. Although the price tag of sugar in the worldwide marketplace has come down, it is anticipated to stay low only for a quick period, trade sources stated.