Ram Gopal Yadav

Prices of sugar fell in the key wholesale markets of Delhi because of weak demand from bulk buyers. Millers have lowered prices of sugar to trigger demand. Sugar prices in Mumbai, however, were steady in a thin trade. Buyers are in a wait-and-watch mode. Everyone is waiting for government action. The government is likely to allow import of 300,000-500,000 tonne of sugar at zero duty to augment supply during the upcoming festival season.

U.S. beet sugar production for the 2017/18 August-July crop year is increased by 89,500 short tons, raw value (STRV) to 5.131 million based on area and sugarbeet yield forecasts made by NASS in Crop Production report. Early-season production occurring in August and September is projected to constitute 10.7 percent of the total. Revised fiscal 2016/17 production of 4.998 million STRV incorporates the updated early season production. The projection for fiscal 2017/18 is 5.068 million STRV, up 80,000 from last month. Although NASS forecasts reduced area harvested for both Florida and Louisiana sugarcane, forecast yields in both states are up strongly over last year. Florida cane sugar production for 2017/18 is increased by 126,000 STRV to 2.126 million and Louisiana is increased by 26,000 STRV to 1.626 million. USDA increased the 2016/17 raw sugar tariff-rate quota (TRQ) by 269,724 STRV and extended the time under which the sugar can enter by an additional month to October 31, in the 2017/18 fiscal year. The Office of the U.S. Trade Representative allocated this amount and reallocated existing, but yet unshipped, raw sugar TRQ among supplying countries. It is estimated that an additional 148,470 STRV of TRQ raw sugar will enter in 2016/17 and 161,499 STRV in 2017/18. Sugar imported from Mexico is projected to increase by 103,932 STRV in 2016/17 after the Commerce Department increased the 2016/17 Export Limit but is reduced by nearly that same amount in 2017/18 due to lower beginning stocks in Mexico. Re-export imports of 25,000 STRV previously estimated to enter in 2016/17 are now projected to enter in 2017/18. High-tier tariff imports for 2016/17 are reduced to 10,000 STRV, based on the pace to date. Mexico 2016/17 sugar imports and deliveries for consumption are up fractionally based on the pace to date. Deliveries in 2017/18 are increased marginally to keep sweetener consumption per capita the same as in 2016/17. Exports to the United States in 2016/17 are increased by 88,949 MT to match the Export Limit increase made by the Commerce Department. These adjustments for 2016/17 imply a reduction in ending stocks of 86,577 MT. Exports to the United States for 2017/18 are residually projected at 1.466 million MT, an amount 94,091 lower than projected last month.

Pakistan is expected to import a record 1.6 million tonne soybean in 2016-17 and around 2 million tonne in 2017-18. Higher demand for soybean from Pakistan is seen coming from poultry feed sector in the country. The country soy oil import is expected to be around 200,000 tonne in 2016-17 compared with 184,000 tonne in 2015-16. For Soy oil 2017-18, import is pegged at 250,000 tonne. Pakistan palm oil import is pegged at 3.0 million tonne in 2016-17 against 2.7 million tonne in 2015-16, while palm oil import is seen at 3.1 million tonne in 2017-18. Pakistan is one of the largest edible oil importers in the world.

There are sufficient sugar stocks in India to take the country through the next sugar marketing year. This came amid reports that the government is contemplating another round of sugar imports to meet the anticipated high demand during the upcoming festival season. Sugar production fell below consumption in the 2016-17 marketing year. This had led to a surge in sugar prices, forcing the government to direct mills to maintain demand-supply balance and curtail the prices. The current prices are not higher than the previous year. The union government, which had increased the import duty on sugar to 50 per cent in July, is reportedly contemplating cutting it to 25 per cent and allowing import of sugar to augment supplies during the festival season.

Prices of sugar were largely unchanged in the key wholesale markets of the country due to lacklustre trade. Thin trade in the market can be attributed to the fear of government action to ensure enough supplies in the domestic market. The government is likely to allow import of 300,000-500,000 tonne sugar at zero duty to augment supply during the upcoming festival season.