- India’s sugar export success story
- Sugar exports in India have increased from $810.9 million in 2017-18 to $4.6 billion in 2021-22, and could reach $5.5 billion in the fiscal year ending March 31.
- The increase in quantity is also significant, with India’s shipments increasing from 0.46 lakh tonnes in 2016-17 to 110 lakh tonnes in 2021-22.
- India has risen from a minor player in sugar exports five years ago to second in the world today, trailing only Brazil.
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- Indonesia (16.73 lt), Bangladesh (12.10 lt), Saudi Arabia (6.83 lt), Iraq (4.78 lt), and Malaysia were the top importers of Indian raw sugar (4.15 lt).
- In addition, the country exported 53.71 lt of white/refined sugar, with the top destinations being Afghanistan (7.54 lt), Somalia (5.17 lt), Djibouti (4.90 lt), Sri Lanka (4.27 lt), China (2.58 lt), and Sudan (1.08 lt).
- The European Union has seen the greatest drop in exports (as opposed to India and Brazil, which only crush cane): from 39.74 lt in 2017-18 to 8.02 lt in 2021-22.
Which sugar grades does India export?
- After the first crystallisation of juice obtained from cane crushing, mills produce raw sugar.
- This sugar has an ICUMSA value of 600-1,200 or higher and is rough and brownish in colour.
- ICUMSA is a color-based measure of sugar purity.
- This raw sugar is refined in order to remove impurities and de-colorize it.
- The finished product is refined white cane sugar with an ICUMSA value of 45.
- Until 2017-18, India primarily shipped plantation white sugar with 100-150 ICUMSA value, also known in international markets as low-quality whites or LQW.
Reasons for India’s increased sugar exports
- Unlike Brazilian raw sugar, Indian raw sugar is dextran-free.
- Indian mills can supply raws with polarisations ranging from 98.5 to 99.5%, which is higher than that of raws from Brazil, Thailand, and Australia.
- Indian raws are currently trading at a 4% premium to the global benchmark (New York No. 11 futures contract), while LQW is trading at a $40/tonne discount to the global price (London No. 5 futures) for 45 ICUMSA whites.
- Indonesia agreed to change its rules in December 2019 to allow imports from India, bolstering India’s efforts to increase raw material exports.
Source: https://indianexpress.com/article/explained/explained-economics/india-sugar-export-surge-economics-explained-8507027/