Additional 1 million tonnes of Sugar export
News: Indian government is expected to allow 1.0 million tonnes of sugar exports in sugar season 2021-22. It is important to note that sugar industry has already exported 10 million tonnes of sugar in the current season & additional export of 1 million tonnes would bring down sugar inventory to the level of 5.7 million tonnes as on September 2022.
Views: Given, Sugar production has been continuously increasing, availability of sugar even in next season would be enough for export to the tune of 6-7 million tonnes. We believe this additional export would be easily absorbed considering global white sugar prices are trading at US$ 530 / tonnes (which is at extremely remunerative levels). This would result in uptick in domestic sugar prices by Rs2 / kg (current sugar prices in UP is Rs35/kg) given festive season demand is likely to kick in from august onwards. We estimate average sugar realisation for UP based millers at Rs35.5-Rs 36/kg for FY23 & FY24.