India has exported 1.5 million tonnes of white sugar since January, when a ban on overseas sales was lifted, and is unlikely to strike new deals before the crop year ends in September, sources said on Tuesday. India stopped sugar exports in July 2006 to tame inflation and then allowed them to avoid a glut in domestic markets.
But global prices had by then fallen, making exports less profitable. "Altogether mills have exported 1.5 million tonnes of sugar since January," a government official, who did not wish to be named, told Reuters.
A trade official said further overseas sales were unlikely in the current crop year. Sugar mills no longer need to seek government approval for exports. According to trade estimates, India is likely to churn out a record 28.5 million tonnes of the sweetener in the cane crushing season to September 2007, up from 19.3 million tonnes a year ago.
India consumes 19-20 million tonnes annually. The trade official said higher output estimates have dampened sentiment and slack global demand has led to a glut in India. "White sugar exports have been a shade better. We thought exports from India will not be more than one million tonnes due to the oversupply in global markets," he said.
A large amount of the exports were to meet obligations of mills that imported raw sugar, he said. To meet an export obligation, Indian sugar mills that imported duty-free raw sugar about 2 years ago need to sell an equal quantity of white sugar in overseas markets.
India has decided to export around 550,000 tonnes of raw sugar to refineries in the Middle East and one trading firm. "You will get to see more raw sugar export deals. The new sugar season, we hope, will brighten prospects of raw sugar exports," the trade official said.
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