Difficulty in export of sugar due to high domestic market price

07-Feb-2025 08:30 PM

The article highlights the challenges India is facing in exporting sugar despite having set an export quota of 10 lakh tons.

A key issue is that the domestic market price for sugar has risen significantly, making it more attractive for millers to sell within India rather than exporting.

The price surge is attributed to concerns over a potential decline in domestic production, leading to millers holding on to their sugar stocks and demanding higher export prices.

The price of sugar in the domestic market has jumped to Rs 41,000 per tonne, and millers are seeking around Rs 45,000 per tonne for export sugar.

This demand is higher than the prices offered in international markets, such as the London Exchange (where white sugar futures are priced at $519.90 per tonne) and the New York Exchange (where raw sugar futures are priced at Rs 37,345 per tonne).

As a result, the exporters are having difficulty securing contracts, with some mills even selling their export licenses instead.

While India is still expected to export a large quantity of sugar to countries like Bangladesh, Nepal, and Sri Lanka, the high domestic prices and lower global demand are causing a slowdown in the process.

This situation suggests that the export market may not see significant growth in the near future unless the domestic price dynamics change.