By Pratik Parija and Yoga Rusmana

Indian sugar millers, saddled with document stockpiles, are desperate to money in on the prospect of resuming exports to Indonesia after being absent from the world’s prime import marketplace for years.

The nation, which vies with Brazil as the highest producer, could promote 250,000 tons of uncooked sugar to Indonesia by the top of the native crushing interval in Could after a change in high quality guidelines by the Southeast Asian nation, in response to the median of six estimates in a Bloomberg survey of merchants and officers.

India is returning to Indonesia after a extreme drought minimize manufacturing in Thailand, usually the principle provider of uncooked sugar to the nation. The brand new export market could assist rein in India’s ballooning reserves, which surged to a document of greater than 14 million tons on Oct. 1 after bumper harvests.

“It is a golden alternative for us to export sugar to Indonesia,” mentioned Prakash Naiknavare, managing director of the Nationwide Federation of Cooperative Sugar Factories Ltd., a producers’ group. “Mills simply must shut white sugar manufacturing and begin making raws within the subsequent two months earlier than the crushing season will get over.”


Indonesia modified the colour specification for uncooked sugar imports to permit shipments from India, Kasdi Subagyono, director normal of property crops on the Agriculture Ministry mentioned Monday. The federal government halved the ICUMSA measure to 600, Subagyono mentioned, including Indonesia wants sugar to satisfy rising family consumption. Whereas focused at India, the decrease degree applies to all suppliers.

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The ICUMSA is the Worldwide Fee for Uniform Strategies of Sugar Evaluation. Most Indian mills make uncooked sugar with an ICUMSA of as a lot as 800 and couldn’t ship to Indonesia, which had a degree for imported sugar of 1,200.

International Costs

Rising exports from India could curb the rise in international costs which have surged about 10% this yr on concern about manufacturing in No. 2 exporter Thailand, hit with its worst drought in 40 years. Sugar exports from the nation might drop about 40% to six million tons, in response to one business estimate. Uncooked sugar futures for Could in New York rose 1.2% to 15.05 cents per pound on Wednesday.

“Export contracts should be signed rapidly for mills in Maharashtra and Karnataka to supply uncooked sugar earlier than crushing ends in a few month,” mentioned Abinash Verma, director normal of Indian Sugar Mills Affiliation. “A fast reallocation of export quotas to mills in northern India will assist them improve manufacturing of uncooked sugar earlier than crushing ends there in Could.”


The federal government is contemplating to switch export quotas to mills which have exhausted most of their limits and are keen to ship extra, from these that are unable to make the most of full quotas, the affiliation mentioned on Tuesday. India’s sugar exports could also be greater than 5 million tons in 2019-20, in contrast with 6 million tons quota allotted by the federal government, it mentioned.

The U.S. Division of Agriculture estimates that Indonesia, the world’s greatest importer of the sweetener, will purchase four.four million tons of uncooked sugar in 2019-20.

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Indonesian refiners are ready for an official notification on the ICUMSA rule earlier than coming into import contracts with Indian suppliers, mentioned Bernardi Dharmawan, chairman of the Indonesia Sugar Refiners Affiliation, a gaggle of 11 refiners that solely course of imported uncooked sugar for industrial customers.

Indonesia could purchase 300,000 tons from India this yr, contemplating poor provides from Thailand, he mentioned, including precise purchases rely upon costs.