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India's sugar export, domestic sales hit due to lockdown: ISMA

Date: 17-04-2020
Subject: India's sugar export, domestic sales hit due to lockdown: ISMA
India's sugar sales in both domestic and overseas markets have taken a beating in view of the nationwide lockdown imposed by the government for preventing the spread of the deadly COVID-19, industry body ISMA said on Thursday.

However, fall in overseas sales of sugar during the lockdown is expected to "partially or largely" get compensated by the extra sales to Indonesia, which is likely to meet its sugar demand from India in view of shortages in Thailand, it said.

Meanwhile, the country's total sugar production has reached 24.78 million tonne (MT) till April 15 of the 2019-20 marketing year (October-September), down by 20 percent from 31.17MT in the year-ago period, it added.

"The exports have been affected due to sudden drop in global sugar prices, but the recent depreciation of rupee is giving some relief to the exporters," Indian Sugar Mills Association (ISMA) said in a statement.

Also, Indian sugar will be in very high demand in Indonesia after it opened its market by giving preferential lower customs duty along with Thailand and Australia, it said.

Already, sugar is getting exported to Indonesia over the last few weeks. But a major portion of the unmet import demand from Indonesia will come to India, which can see a spurt from June-July and may continue for another year or so, it added.

According to ISMA, Indonesia imports about 80-85 percent of its sugar demand from Thailand, where production has fallen sharply by 6.5MT in the current year and is expected to drop further next year as well.

The industry body also mentioned that Indian exporters would have more sugar for shipments after the government reallocated the unexported quota fixed for the current year.

For the current year, the government has allowed export of 6MT of sugar under the quota to help deal with the surplus sugar.

On domestic sugar sales, the industry body said sales and despatches of sugar have got "affected" due to the countrywide lockdown.

Closure of restaurants, malls, movie halls among other public premises has in turn impacted the demand for sugar sweetened products like ice cream, beverages, juices, confectionaries, sweets, etc, he said.

ISMA further said the domestic pipeline, which usually holds 10-15 lakh tons of sugar, is expected to have dried up during the lockdown, when sugar in the pipeline got used up.

"Hence, as soon as the lockdown is lifted, there can be an increase in sugar demand, especially from the bulk consumers when their operations start resuming," it added.

On supply of ethanol, the industry body said there were initial problems in offtake by oil marketing companies due to fall in petrol consumption during the lockdown period. But after quick intervention, the supplies were shifted to states and depots where requirement was there.

So ethanol has now started going to newer depots in Jharkhand, Bengal, MP, Chhattisgarh, Rajasthan, Gujarat, AP, Telangana and Kerala. Efforts are being explored to see if ethanol can be sent to Odisha and Assam too.

The ethanol supplies/offtake have improved and it is expected that with newer depots taking ethanol, there will be adequate offtake as per contracts, it added.

ISMA also mentioned that a majority of sugar companies decided to make hand sanitizers to supply to hospitals and institutions by using a part of the ethanol/ENA production, thereby ensuring that India does not face any shortage of good quality hand sanitizers.

"Some of them are supplying the sanitizers at cost price or even free of cost. With the State Excise department and State Drug Controllers giving full cooperation, this new segment of production of hand sanitizers has been successfully launched very quickly by most of the sugar companies," it added.

Source:- moneycontrol.com

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