“After the report about default by Indian millers, the market went up by $20-25/tonne as buyers were getting a signal that Indian sugar may not come at a lower rate,” said an exporter from Pune district in Maharashtra, adding, “Although firm global prices are good for Indian exports, after looking at the new offers, defaults have increased again.”
Defaults were reported from Maharashtra, Karnataka and Gujarat, said exporters.
Global sugar prices had started moving upwards after India announced its export policy in the first week of November, permitting export of only 60 lakh tonnes of sugar as against 112 lakh tonnes exported in 2021-11. This was followed by reports about some decline in 2022-23 sugar production of Brazil.
“Mills are defaulting in many ways. Refusing to honour the contract, some mills are selling sugar to other buyers who are willing to offer higher prices, some mills are offering lower than the contracted quantity of sugar, while others are asking for higher than the contracted rate,” said the top executive of one of the largest sugar export houses based in south Maharashtra.
According to trade sources, Indian exporters have so far contracted about 35-40 lakh tonnes of sugar exports.
“Defaults have slowed down the pace of signing export deals, which have reached around 40 lakh tonnes till date. Had there been no defaults, India could have contracted to export the entire 60 lakh tonnes of quota allowed by the government,” said a sugar trader from an MNC export house, who did not want to be identified.