India to export raw sugar for first time in three years

Indian sugar mills have signed deals to export raw sugar for the first time in three years as a rally in New York prices to seven-month highs along with government subsidies made exports lucrative, five dealers and two industry officials told Reuters.

Mills in the world's second biggest sugar producer were reluctant to sign new export contracts until recently as global prices were trading far below local prices.

But a rally in international raw sugar prices along with a rupee hitting a record low has made exports viable.

Mills have contracted to export 150,000 tonnes raw sugar at around $280 per tonne on a free-on-board (FOB) basis for shipment in November-December, the dealers said.

More Indian exports could weigh on global prices and trim the market share of rivals Brazil and Thailand, the world's top two sugar suppliers.

Indian mills traditionally produce white sugar for local consumption, but this year they are planning to export raw sugar as the country faces a surplus harvest for the second straight year.

"In the last few days suddenly things are moving in favour of Indian mills," said BB Thombare, president of the Western India Sugar Mills Association.

India last month approved incentives such as a transport subsidy for export and a direct cane payment to farmers to encourage cash-strapped mills to export surplus sugar in the 2018/19 season.