Cash-strapped sugar mills dump sweetener as global prices crash

Shiv Kumar

Tribune News Service

Mumbai, July 23

Indian sugar mills have joined producers from Brazil in dumping the sweetener in the already weak international markets thereby causing prices to soften further, according to trade sources here.

“Export of sugar from India has increased after the government announced a subsidy of Rs 4,000 per tonne. If the government provides more incentives as demanded by the industry, exports would go up even further,” says Sanjeev Babar, managing director, Maharashtra State Co-operative Sugar Factories Federation.

Mills across India are sitting on more than 10 million tonne of sugar after two years of bumper harvest, according to traders here.

In Maharashtra, sugar co-operatives are facing a finance crunch and desperately dumping the sweetener in both domestic and international markets. Several co-operatives which are under pressure to pay farmers are selling sugar below the cost price to improve cash flows, say sources.

As per commodity analysts, sugar prices are falling internationally with Brazil, the world’s biggest producer, dumping sugar to raise funds.

So far, India has exported nearly 1 lakh tonne of sugar this year, according to analysts.