Global sugar prices have been rising and were up 20 percent in the month of April. In an interview with CNBC-TV18, Abinash Verma, director-general of the Indian Sugar Mills Association (ISMA) and M Manickam, CMD of Sakthi Sugars discussed the price outlook.
Varma said that the global prices are up because the Brazilian production is going to be almost about 7-8 million tonne less than last year as well as the fact that the second-largest sugar exporter in the world, Thailand, for continuous two years has produced about 7-8 million tonne less than normal.
“If the two largest exporters in the world together produce about 15 million tonnes less than what they usually do, it gives an opportunity to India to export into the international market and India is now one of the largest sugar exporters and has a large surplus carryforward from the last two years. So it gives an opportunity to export, reduce our surplus sugar as well as gain from the sugar price rally that has happened,” Varma weighed in.
Meanwhile, Manickam said, “Looking at it from a long-term perspective, I do not think we can export because Indian cane prices are almost double the world prices. So with all these programmes there should be some amount of temperance in announcing the cane prices, at least let them come down to that global level rather than competing with each other; state governments are competing and trying to announce higher price – that should be done away with and until they do that there is not going to have long-term stability.”
For the entire discussion, watch the video