The International Sugar Organization (ISO) expects India to export more sugar in 2011-12 as global stocks deplete, creating a market for the second largest producer of the sweetener.
“We guess India's exports will be more this year. The prices are supportive as global stocks have depleted to a large extent,” said Mr Peter Baron, Executive Director, ISO. “Though India can theoretically export up to 4 million tonnes from its surplus, the actual exports would depend on the Government's policy,” Mr Baron said.
The ISO has forecast India's 2011-12 sugar output at 25.8 million tonnes, up 7.5 per cent from the previous year's 24 million tonnes. India exported 2.2 million tonnes last year and the industry estimates a surplus of 9 million tonnes by the end of 2011-12 season. The Empowered Group of Ministers is likely to decide on the quantum of exports to be allowed on Tuesday.
IMPACT ON PRICES
However, Mr Baron maintained that the India's exports will not have much impact on prices. The market has already taken account of 5 lakh tonnes that the Indian Government may allow to export.
Commenting on Brazil's output, Mr Baron said “It is for the first time Brazil will produce less than the previous year. However, it will not be a dramatic change”.
The regression in Brazilian output will be offset by good yields in India, Thailand, Australia, and European Union, Mr Baron said. ISO has projected the global sugar output for 2011-12 at 172.18 million tonnes, up 4 per cent over previous year's 165.18 million tonnes.
However, the low level of stocks would keep the global prices relatively stable over the next three to four months, Mr Baron said. ISO expects the global stocks at the end of 2011-12 year at 57 million tonnes, up marginally over previous year's 57.14 million tonnes.
ISO expects the stocks to consumption ratio in percentage terms at 34.35 per cent for 2011-12, down from 34.84 per cent in the previous year.
“We expect the raw sugar prices to be in the range of 24 to 27 cents a pound over the next three to four months,” he said. However, Mr Baron did not comment on the global sugar prices beyond March-April 2012, when Brazilian output comes into the market.