Do you still remember the article published by this issue on August 9 last year, "Which Listed Companies Will Benefit from India's May Restrict Sugar Exports After Banning Rice Exports"? The closing price of COFCO Sugar on the day the article was 8.33 yuan, and the closing price on April 9 this year was 10.21 yuan.
Since this account has bought some COFCO Sugar stocks, it has continued to pay attention to international sugar production and market sugar price trends. This number found that Brazil, one of the world's two largest sugar producers, has a failed sugarcane harvest this year, and India, another big country, may have more sugarcane production this year than last year, but Modi does not want domestic prices to rise in order to run for re-election, so he is unwilling to abandon the policy of restricting sugar exports, and intends to increase the limit on ethanol production from sugarcane. In this case, although the price of sugar in the international market has fallen recently, it is estimated that it will still fluctuate at a high level, which will undoubtedly constitute a strong support for the shares of domestic listed sugar companies. What do you think about this, and welcome to express your opinions.
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India may allow sugar mills to use more cane sugar to produce ethanol, a move that could reduce the likelihood of easing sugar export restrictions in the near term, according to people familiar with the matter.
Indian sugarcane farmers harvest sugarcane
The government, who spoke on condition of anonymity, said the government was considering a proposal to allow factories to use an additional 800,000 tonnes of sugar for biofuel production this year because sugar production could be higher than expected. This means that the Indian government will use more sugar for biofuels, on top of the 17 million tonnes previously allowed for ethanol production.
A spokesperson for the Ministry of Food and Commerce did not immediately comment on the news.
India, the world's second-largest sugar producer, will not increase its sugar export quota in the near future, which will dampen hopes that India will add 1 million tonnes of sugar to the sugar crushing season that ends in September, the person said. India's move is expected to stabilize the decline in global sugar prices this month.
On October 1 last year, India expanded its export restrictions to protect domestic supplies ahead of national elections. Prime Minister Narendra Modi is seeking a third five-year term, and his government has taken several measures to rein in rising food prices, including restricting the export of wheat and rice, selling the country's grain reserves on the open market and cracking down on hoarding.
Supporters of Indian Prime Minister Narendra Modi posed as Modi to canvass for his votes
The move will help sugar mills and ethanol distilleries, which have invested 15,000 crore ($1.8 billion), to increase their sugarcane-based ethanol production capacity within three years. It will also help them pay sugarcane farmers in a timely manner. India aims to add 15% ethanol to gasoline in 2023-24.
In 2023-2024, India's sugar production could reach 34 million tonnes, slightly higher than the projected 335,000 tonnes. According to the Indian Sugar and Bioenergy Manufacturers Association, sugarcane in Maharashtra and Karnataka is justifiably higher than expected. Estimates of sugar production do not take into account the impact of the government's permission to increase ethanol production.
India May Devote More Sugar to Ethanol in Blow to Export Hopes. By Pratik Parija on Bloomberg, April 9, 2024
India may allow sugar mills to use more of the sweetener to make ethanol, in a move likely to reduce the odds of easing export curbs any time soon, according to a person familiar with the matter.
The government is considering a proposal to permit factories to use an additional 800,000 tons of sugar for biofuel this year, as the crop is likely to be higher than predicted, said the person, who asked not to be identified as the talks are confidential. That would be on top of 1.7 million tons allocated earlier.
Indian food is a big consumer of sugar
A spokesperson representing both the food and commerce ministries didn’t immediately comment.
The second-biggest sugar producer will refrain from releasing any export quota in the near future, said the person, damping industry’s hopes of shipping as much as 1 million tons in the current season ending September. The move by India is likely to support global sugar prices that have fallen this month.
The nation extended its export restrictions in October to protect domestic supplies ahead of national elections. The administration of Prime Minister Narendra Modi, who is seeking a third five-year term in polls starting this month, has taken several steps to contain high food prices. It curbed shipments of wheat and rice, sold grains from state reserves in the open market and cracked down on hoarding.
The move would help sugar mills and ethanol distilleries that have invested as much as 150 billion rupees ($1.8 billion) in three years to increase cane-based ethanol capacity. It will also help the factories make timely payments to farmers. The country has a goal to blend 15% of ethanol in gasoline in 2023-24.
India’s sugar production may total 34 million tons in 2023-24, compared with a forecast of 33.05 million in January, on higher-than-expected cane supplies in Maharashtra and Karnataka, according to the Indian Sugar and Bio-energy Manufacturers Association. Sugar output figures are calculated before the diversion of sweetener to make ethanol.