According to traders, Indian sugar has found its way into the Egyptian market, filling the void left by Brazil. The transcontinental nation is likely to purchase sugar from India for the first time in decades, having previously sourced it from the Latin American country.
"Egypt obtains Indian sugar through international trading companies." They buy in small quantities and do so either on the high seas or after reaching a specific destination (ports) in the region," said a trading source.
Indian trade unaware
Sugar destined for troubled destinations in the region, such as Syria and Lebanon, is also being rerouted to Egypt, according to the source.
When contacted, officials and traders in the Indian sugar industry said they were unaware of any such development.
"Egypt is too far away for parity to Indian exporters," said Ravi Gupta, Chairman, Export Committee, All India Sugar Traders Association (AISTA). Abhinash Varma, Director-General of the Indian Sugar Mills Association, agreed.
According to Vidya Sagar VR, Director of Bulk Logix, Egypt purchases white and raw sugar from India.
Trading agencies have exported at least 15,000 tonnes to Egypt in the last month. India's S-30 white sugar with 100 ICUMSA (a global standard for sugar standards) has been shipped to Cairo.
Indian sugar is in high demand on the global market, which is experiencing a deficit as a result of low production in Brazil and a rebound in consumption. Sugar prices have risen to a 57-month high as a result of supply concerns.
Raw sugar for cash is currently quoted at 19.99 US cents per pound (33,050 per tonne) on the Intercontinental Exchange, as are March contracts (ICE). White sugar is quoted at $513.70 per tonne (39,700) in London for March delivery.
Aside from Egypt, a significant amount of Indian sugar is exported to Djibouti. "Indian sugar is shipped from Djibouti to Ethiopia." Every month, at least 25,000-30,000 tonnes have been shipped to that region, according to Sagar.
Experts in the sugar industry believe that India is well-positioned to meet the rising global demand for sugar, even as other suppliers such as Brazil, Thailand, and Australia struggle.
Last season, India exported 7.1 million tonnes of sugar, with shipments expected to be 6-7 million tonnes this season. Exports are expected to aid in the stabilization of domestic sugar prices. In Maharashtra, S-30 grade sugar is currently quoted at $3,225-275 per quintal.
India's 31 million tonnes of sugar production for this season is also expected to help exports. Production was 31.2 mt last season. Last year's exports helped reduce inventories to 8.3 million tonnes, down from 10.7 million tonnes the previous year.
