January 19, 2021
S&P Global Platts | https://bit.ly/2YcxRdy
HIGHLIGHTS
Platts Analytics estimates India 2020-21 production at 32.5 mil mt
Indian raw sugar at $10-$15/mt discount to Thai on CFR Indonesia basis
Crushing operations at 487 mills over Oct. 1-Jan. 15 up 11% on year
New York — India's sugar output surged 31% year on year to 14.27 million mt over the start of the crushing season on Oct. 1 to Jan. 15, Indian Sugar Mills Association data released Jan. 18 showed, due to an early start to cane crushing amid higher cane availability.
A total of 487 mills in India undertook cane crushing activities in India over Oct. 1-Jan. 15, up from 440 mills over the same period a year earlier, the data showed.
The sugar marketing year in India, the world's second-biggest producer behind Brazil, runs October-September.
S&P Global Platts Analytics estimates production for the 2020-21 marketing year at 32.5 million mt, up 19.1% year on year.
In India's Maharashtra state, 181 mills produced 5.16 million mt of sugar over Oct. 1-Jan. 15, surging from 2.55 million mt produced over the same period a year earlier by 139 mills, the ISMA data showed.
In Uttar Pradesh, 120 mills produced 4.3 million mt until Jan. 15, compared with 119 mills that produced 4.38 million mt in the same period a year earlier. The slight dip in production in the state was attributed to lower cane yields and lower sugar recoveries.
Karnataka produced 2.98 million mt from 66 mills until mid-January, up from 2.19 million mt from 63 mills in the same period last season.
Trade sources said the increase in Indian sugar production would make competing Thai sugar less attractive in key Asian destination markets such as Indonesia, Malaysia and South Korea.
Thai HiPol raw sugar spot loading cargoes into Indonesia are currently priced at $451/mt CFR after accounting for freight and import tax, $10-$15/mt higher than Indian VHP raw sugar, S&P Global Platts data showed.
Platts assessed Thai HiPol raw sugar for February shipment at a premium of 178 points over the New York No. 11 March (H) futures on Jan. 15.
India exported 121,295 mt of sugar to Indonesia over Oct. 1-Jan. 15, comprising 66,000 mt of raw sugar and 55,295 mt of refined sugar, in a shipping report seen by Platts. This compares with no exports to Indonesia, which typically relies on Thai supply, in the same period a year earlier.
"Buyers like Indonesia can choose the cheapest origins and have been replacing Thai raws with Indian and Brazilian sugar," a Singapore-based trader said.