India’s domestic sugar consumption is estimated at around 27.5 million tonnes

India is poised to allow 5 million tonnes of sugar exports in the first tranche for the new marketing year beginning October, two government sources said on Wednesday.

“The permission to export 5 million tonnes of sugar is expected in the coming weeks and once we have a better sense about next sugar year’s production, we could allow another 3 to 5 million tonnes for exports,” said one of the sources who did not wish to be named in line with official rules.

“Although it is a little early to get a clear idea about next year’s production, early estimates suggest sugar output in 2022-23 would hover around this year’s record 36 million tonnes, the official said.

On Oct. 1, 2022, when the new season begins, mills’ carryover stocks from the previous season are expected at 6 million tonnes against 8 million tonnes a year earlier.

“After factoring in local demand, the need for ethanol production and mills’ requirement for their yearly carryover stocks, we believe that India will have a large exportable surplus in the 2022-23 year,” said the second source.

“But given the erratic weather patterns impacting crops and agricultural production, we do not want to allow exports of 8 or 9 million tonnes in just one go,” the second source said. “We’ll be rather cautious.”

India banned wheat exports earlier this year and last week imposed curbs on rice shipments as adverse climatic conditions hit output and planting.

India’s domestic sugar consumption is estimated at around 27.5 million tonnes and mills are expected to divert 4.5 million tonnes of sugar for ethanol production in the 2022-23 season. Mills will also set aside at least 6 million tonnes of sugar as their annual carryover stocks.

Cashing in on attractive global prices, traders have already signed deals to export 4,00,000 tonnes of raw sugar for the 2022/23 season.

India’s rice exports could fall 16.2 mn tonne from 21.2 million tone

India’s rice exports could fall by around a quarter this year as New Delhi’s restrictions force buyers to switch to rival suppliers which are offering the grain at a cheaper price, trade and industry officials said.

Late last week, the world’s biggest exporter of the grain banned shipments of broken rice and imposed a 20% duty on exports of various other grades as the country tries to boost supplies and calm prices after below-average monsoon rainfall curtailed planting.

“The duty has made Indian rice expensive. Exports would drop by at least 5 million tonnes,” B.V. Krishna Rao, president of The Rice Exporters Association (TREA), told Reuters. That would leave exports this year at around 16.2 million tonnes.

Rice shipments reached a record 21.2 million tonnes in the 2021/22 fiscal year, more than the combined shipments of the world’s next four biggest exporters of the grain: Thailand, Vietnam, Pakistan and the United States.

New Delhi has imposed the duty only on white rice, which could prompt some buyers to switch to parboiled rice, which is exempted from export duties, Mr. Rao said.

Rice exports had jumped to 9.36 million tonnes in the first five months of the current fiscal year that began on April 1, up from 8.36 million tonnes in the same period a year ago, according to government data.

“A lot of rice has already been shipped out so far in the current fiscal year, but we expect shipments to fall sharply in the coming months due to the recent policy decisions,” said Dev Garg, the director of ViExport, a New Delhi-based exporter.

Lower supplies from India have been prompting rival suppliers to raise prices, and this would make Indian rice competitive in due course, said Nitin Gupta, vice president for Olam India’s rice business.

Thailand, Vietnam and other suppliers have raised prices of white rice after India imposed curbs the last week.

“India was the cheapest supplier of white rice. With the duty, Indian rice would be expensive or at par with the other suppliers,” said Himanshu Agarwal, executive director at Satyam Balajee, India’s biggest rice exporter.