Indian millers want to export extra 1.5 million tonnes of sugar

Indian sugar millers want to export an extra 1.5 million tonnes of the sweetener under the Open General Licence (OGL) scheme this season with a bumper harvest likely, Narendra Murkumbi, president of the Indian Sugar Mills Association said on Tuesday.
"Immediate exports are required to stabilise falling domestic prices. In the international market prices are rising and India should grab these opportunities," Murkumbi told journalists. A week ago, ISMA's director-general, Abinash Verma, made a call for 500,000 tonnes of OGL exports on top of the half a million tonnes already approved by the government.
In the domestic market, sugar prices have fallen over 10 percent in the past month, while during the same period the international market has risen 17 percent. India is the world's biggest consumer and second-largest producer of sugar. A severe drought in 2009 pushed the Asian giant onto the international markets to buy imports, triggering sharp gains in global prices.
This year, a normal start to India's June to September monsoon season has raised expectations output will be ample to cover the country's demand as sugarcane acreage is likely to go up by 5 percent in 2011/12 season. Already, opening stock for the 2011/12 season is seen at 6.5 million tonnes, Murkumbi said.
"Despite additional exports of 1.5 million tonnes, there wouldn't be any shortage in the domestic market as production for the current year is estimated at 24.2 million tonnes and opening stock for 2011/12 is at 6.5 million tonnes," Murkumbi said. Many mills in Western Maharashtra state are already facing storage problems and have kept roughly 1.5 million tonnes of sugar in the open under plastic covers, he said. Indian millers were raising export prices, tracking gains in the international market, and were currently selling at $720 per tonne free on board - a rise of $80 since the beginning of May, Murukumbi said.