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India has extended by two weeks a deadline to export 800,000 tonnes of sugar as annual monsoon rains make it difficult for many producers to move stocks from factories to ports, the government said on Friday.
Mills in the world’s biggest sugar producer are now allowed to export the sweetener until July 20, the government said in a notification, pushing back the previous July 5 date that some mills missed after heavy rains hampered transport.
Industry representatives welcomed the longer grace period.
“This is a very good step,” said Aditya Jhunjhunwala, president of the Indian Sugar Mills Association (ISMA). “There was a small amount stuck, but it will be moved out before the new deadline.”
India set a July 5 deadline last month after curbing exports in May for the first time in six years.
It capped this season’s exports at 10 million tonnes to prevent a surge in domestic prices after factories sold record volumes on the world market.
The government should now allow further export of the 1 million tonnes of raw sugar that the mills had produced for export before the cap, Jhunjhunwala said.
Additional exports are unlikely to lead to shortages in the domestic market as a bumper crop is expected next season, he added.
India is on course to overtake Brazil to become the world’s biggest sugar producer in the marketing year to September 30, ISMA predicts, with production at 36 million tonnes.
With sugar exports now lucrative due to stable world prices and a weak rupee, the government should immediately announce the policy for the next season, said Raheel Sheikh, managing director of trading company MEIR Commodities India.
“Mills and traders can sign contracts for next season now,” he said. “Even if prices come down in a few months, there will be no impact on exports.”
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