India’s sugar shortfall has shown signs of easing temporarily, as the country appears to be bridging its shortage for the October-November festival season, when demand peaks, through frantic imports.
“The country’s total sugar imports will touch about 1 million tonne next month,” said an official, who didn’t wish to be identified as he is not authorised to speak to the media. But, the quantity is still one-eight of the country’s total expected shortfall in the next sugar season, starting October 1.
India is the world’s largest sugar consumer, second largest producer — next to Brazil — but is back to being a net importer of the commodity for the first time since the 2005-06 surplus due to a drought.
Yields are low also because production usually dips after every two-three years of glut due to the “cyclical” nature of the crop.
The monthly sale quota for September has been raised to 2 million tonnes, a government statement said. “So, we should be comfortable in the festival season,” the official said.
The sweetener is tightly regulated in India and the government decides how much each mill can sell each month, based on projected demand. Last month’s quota was 1.6 million tonnes.
The government on Thursday also decided to introduce a bi-monthly sale system from September 9 to increase sugar availability.
Millers will now sell their monthly quota in two equal instalments every fortnight. They will also have to report their actual sale figures to the government each fortnight.
India is set to open the new sugar season with wafer-thin opening balance or stocks, compared to a comfortable 10 million tonnes last year, a signal that the country will have to depend on imports.
The fresh imports include combined buying by government and private firms, a source said. India is still trawling global markets to bridge the demand-supply gap, sending global prices to a 28-year high. Sugar is mainly imported from Brazil and Thailand.