Sugar exports may drop 24% this year due to logistics issues: Trade body

The drop was due to logistics constraints and less chances of shipments to Iran, trade body All India Sugar Trade Association (AISTA) said

India's sugar exports may drop over 24 per cent to around 4.3 million tonnes in the current marketing season 2020-21, due to logistics constrains and less chances of shipments to Iran, trade body All India Sugar Trade Association (AISTA) said on Thursday.

AISTA pegged sugar output to be higher at 29.9 million tonnes in the current 2020-21 marketing season (October-September), against 27.40 million tonnes in the last season.

Sugar mills had exported 5.7 million tonnes of sugar against the mandatory quota of 6 million tonnes set for the 2019-20 season (October-September).

In a statement, AISTA said its crop committee, which reviewed the country's sugar production for this year, has reported "export of sugar in the current season to be around 4.3 million tonne. The exports are likely to less than last year due to the logistics constrains."

The trade body said waiting time at ports is higher due to congestion, owing to shortage of container and large movement of grains, including soyabean, it said.

Further, there are less chances of export to Iran, one of the important sugar customers, as the Islamic Republic's rupee reserves in UCO Bank and IDBI Bank have nearly depleted.

"The chances of export of sugar to Iran are bleak as Indian rupee balances in the Vostro accounts held by Iranian banks with UCO Bank and IDBI Bank have been nearly drawn down," it added.

On domestic sugar production, AISTA said it is expected to be 29.9 million tonnes in the ongoing 2020-21 marketing season, higher from 27.40 million tonne in the previous season.

Production in the country's top-three sugar-producing states is pegged at 10.5 million tonne in Uttar Pradesh, at 10.2 million tonne in Maharashtra, and at 4.3 million tonne in Karnataka for this current season.

Sugar production stood at 12.60 million tonne in Uttar Pradesh, 6.20 million tonne in Maharashtra and 3.45 million tonne in Karnataka during the marketing season 2019-20.

The trade body said about 2 million tonne sucrose is estimated to be diverted for ethanol production in the current season, while domestic consumption is pegged lower at 25.5 million tonne in the same period as against 26 million tonnes during 2019-20 season.