India's sugar exports on good course; contracts over 50 lakh tonnes so far

India's sugar exports are on a "good course" this year as traders have contracted over 50 lakh tonnes of the sweetener so far, Food Secretary Sudhanshu Pandey said on Monday.

The government has fixed a mandatory export target of 60 lakh tonnes of surplus sugar for the ongoing 2020-21 season (October-September). This export policy was, however, approved only in January.

During the 2019-20 season, India, the world's second-largest sugar-producing nation after Brazil, had shipped 59 lakh tonne of the sweetener.

"Over 50 lakh tonnes of sugar has already been contracted and exports are on a good course," Pandey said in a virtual press conference.

The mandatory sugar export policy was announced to support the sugar industry. The cash-starved mills were allowed to earn from the export to ensure they make timely payment to sugarcane growers, he said.

Besides exports, mills were also encouraged to divert to ethanol production.

Elaborating more, Food Joint Secretary Subhodh Gupta said, "Liquidity is a major problem for the sugar industry. We are resolving these issues in two ways -- one is exporting surplus sugar and the second is diverting towards ethanol."

On sugar exports, Gupta said the progress has been good. Initially, there were logistics problems and the issue of containers.

"Now, the export is smooth. Already, more than 43 lakh tonne of sugar has been despatched from mills. This year, we will be exporting sugar in record less time by June itself," he said.

The money which mills get either by exports or by diverting to ethanol will be used for making cane payment to farmers, he said adding that these measures have helped improve liquidity position of mills and cane arrear is also reducing gradually.

On ethanol blending, the official said the country has touched 7.4 per cent ethanol blending, while 11 sugar producing states and adjoining states have already touched 9.5-10 per cent blending.

"Another five states are in the range of 8-10 per cent. Now, the effort is to increase in states where blending levels are low," he said adding "we should have 10 per cent blending next year pan India."

According to the All India Sugar Trade Association (AISTA), export contracts for 56 lakh tonnes of sugar have already taken place from India so far.

Out of which, about 34.78 tonne of sugar has been shipped, while 4.43 lakh tonne of the sweetener is under loading and another 4.54 lakh tonne is in transit or for delivery to port-based refinery, its data said.

In total, 43.76 lakh tonnes of sugar has been dispatched from mills for export purpose so far this season.

AISTA, however, expressed concern about high freight rates although the availability of containers has increased.

India is left with 4 lakh tonne of sugar to be contracted under the existing policy for which contracts may conclude soon, the trade body added.

Much of the sugar has been exported to Indonesia, Afghanistan and the UAE so far this year.