Economy News

India’s sugar exports to hit new low owing to logistics constraints

According to All India Sugar Trade Association (AISTA), India’s sugar exports are likely to be at least 25 percent lower during the current sugar season owing to “logistics constraints”.

This is particularly due to shortage of container and increase in waiting time for vessels.

Years of bumper cane harvests and record sugar production have hammered Indian sugar prices, making it hard for mills to pay money owed to farmers, who form an influential voting bloc.

Demand for the sweetener from ice cream and beverage makers typically rises during the summer season.

However, this year it has been falling as people are avoiding cold drinks and ice creams due to coronavirus concerns.

AISTA crop committee expects sugar exports to drop to 43 lakh tonnes this season against 57 lakh tonnes last season.

In fact, large movement of grains, including soybean to China, has led to congestion at ports and increased the waiting time for ships.

Last year, The 43 lakh tonnes exports did not include the prospects of exports to Iran which is the largest buyer of the commodity from India.

However, it was expected that Indonesia would make up for the loss of shipments to Iran but this has now been derailed by the shipping woes.

Also, shipping rates have risen globally as demand for goods rebounded more strongly than expected in the second half of 2020 creating a container shortage.

Geopolitical tensions with China have reined in imports into India as well, meaning fewer incoming containers.

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