Indian Sugar Export Struggles Amid Premium Pricing

Indian traders are struggling to finalize sugar export contracts due to high premiums sought by mills. Despite approvals for exports, local price hikes have reduced global competitiveness, affecting shipments. The scenario supports global sugar prices but challenges India’s export-driven strategies amidst fluctuating market dynamics.

Indian traders find themselves in a predicament as they attempt to finalize sugar export contracts. Despite New Delhi's authorization to export 1 million metric tons, mills are demanding premiums over London prices, leaving overseas buyers hesitant to commit, according to trade sources.

The world's second-largest sugar producer, India, is experiencing a slowdown in shipments, a situation that has kept global sugar prices buoyant after reaching a three-year low. India recently permitted the export of 1 million tons to boost local prices and offload surplus stocks, but local rates surged by nearly 10%, prompting mills to seek significant export premiums.

Mumbai-based dealers report that mills are not rushing to sign deals, anticipating a rise in global prices. Traders have contracted 20,000 tonnes of sugar for February shipment at $490 to $510 per ton, surpassing London futures by $10 to $25. This situation highlights the complexity of India's position as a major sugar exporter.

(With inputs from agencies.)