Raw sugar exports zoom this season

"The country has never exported raw sugar in such a big way. This is an achievement; we've been able to capture the markets dominated by Brazil," said S L Jain, director general, Indian Sugar Mills Association.

The main importers of raw sugar are UAE, Egypt, Iran, Bangladesh, Indonesia and Malaysia. Most of these countries earlier bought white sugar but after having set up refining capacities over the last couple of years, they have become buyers of raw sugar. India also has a freight advantage over Brazil.

While the initial export contract was decided at a freight on board (FoB) price of $246 a tonne, this rate went as high as $340 a tonne when the global output projection was revised downwards.

The International Sugar Organisation (ISO) revised the production estimate from 170.308 million tonnes (raw value) in November to 168.438 million tonnes in February.

Sugar export (both raw and white) enjoy the union government's freight assistance of Rs 1,350 a tonne for coastal mills and Rs 1,450 a tonne for non-coastal mills. It also enjoys a duty entitlement passbook scheme benefit at 4 per cent of the FoB value of the export.

Jain, who is also a member-secretary at the Indian Sugar Exim Corporation (ISEC), which alone contracted export of 600,000 tonnes raw sugar, said ISEC's export commitments were fulfilled despite default by certain sugar mills in Maharashtra.

These mills refused to honour export commitments since the prices moved up during the period between the contract and shipment.

"In certain cases, we bought at higher rates from other mills while in some contracts, the delivery got delayed. However, we ensured that none of the contracts were reneged."

In the coming years, export of raw sugar will be far greater in quantity than that of plantation white sugar, added Jain.