NEW DELHI (Dow Jones)--India will likely have 3 million metric tons of surplus sugar for exports in the current marketing year, thanks to a bumper crop and carryover stocks, a top executive at a sugar mills lobby group said Monday.
The quantity includes around 1 million tons that the government has agreed to allow mills and trading agencies for exports to meet an old obligation against tax-free imports of raw sugar, Indian Sugar Mills Association Director General Abinash Verma said in an interview.
Exports by India, the world's top sugar consumer and second-largest producer, may pressure global prices that have almost doubled to 26.32 cents a pound since May after drought-like conditions in top producer and exporter Brazil delayed shipments.
India hadn't allowed sugar exports in the past two years because of a local shortage, but a likely bumper sugarcane crop in the marketing year that started Oct. 1 will mean it won't have to rely on imports to satisfy demand, estimated at 23 million metric tons a year.
"With an expected sugar output of 25.5 million tons and an opening balance of another 5.8 million tons, India is well positioned to export the surplus this year," Verma said. He added that of the total sugar likely to be available, the government can even set aside a buffer before allowing the surplus quantity to be exported.
The industry's sugar production forecast for this year is higher than the government's initial estimate of 24.5 million tons.
"In 2007-08, when sugarcane crop was 348.2 million tons, sugar output was 26.3 million tons. With the same level of sugarcane crop this year, there is no reason why sugar output should be less than our initial estimates," Verma said
