The global market has seen 20 percent gains in sugar prices in the month of April. Although Indian markets have not run up as much, sugar stocks are doing well on the back of strong ethanol production.
Speaking to CNBC-TV18, Abinash Verma, Indian Sugar Mills Association said that with two largest exporters in the world producing 15 million tonne less gives India an opportunity to export into the global market.
“The Brazilian sugar production is going to be about 7-8 million tonne less than what they did last year. Thailand is also producing almost about -7-8 million tonne less than what they usually do. So, with the two largest exporters in the world producing 15 million tonne less than what they usually do gives India an opportunity to export into the international market,” he said.
He said that this also led to an increase in global sugar prices to around 17.6-17.7 cents per pound of sugar. “At this price, it makes sense for India to export large quantities into the international market,” he said.
He also said that India is diverting 2 million tonne of surplus sugar into ethanol production. “In the current year, we are going to reduce our sugar production by 2 million tonne by diverting that into ethanol. So, on one side we are reducing surplus sugar by 2 million tonne and on the other side, we are getting that extra revenue which is quicker. We sell ethanol immediately and it is at a good price and very well supported by the government of India,” he said.
He also said that as of now there is no drop in the domestic demand for sugar. “The demand-supply is much better than what we saw last year and we do not yet see any drop in the sugar demand as of now in the current season,” he said.Watch the video for more.