Strong exports assist UP sugar mills fetch 10% premium in export quota sale

Strong returns on sugar exports helped sugar mills from Uttar Pradesh to commerce their export quota at a premium of about 10% over the prevailing market value for export of white sugar. In keeping with commerce sources, UP mills have offered 5-6 lakh tonnes of their export quota at a mean value of Rs 4/kg.

The 2022-23 sugar export coverage introduced this month permits a sugar mill to swap its export quota with the home gross sales quota of one other sugar mill. Commerce insiders stated that although some exporters have bought the export quota, others need the federal government to make clear if the coverage permits for buying and selling of the export quota.

A number of sources that ET spoke to within the Indian and MNC export group didn’t wish to be recognized. One stated “Some exporters from the western coast have bought export quotas of about 5-6 lakh tonnes from sugar mills from Uttar Pradesh. The speed at which the export quota is being traded is between Rs 3.50/kg to Rs 4.50/kg.”

Merchants advised ET that the sugar mills from Uttar Pradesh are extra fascinated with doing direct export of refined sugar, which is promoting at about Rs 39-40/kg as in opposition to Rs 37/kg being quoted for the low-grade white crystal sugar. “As a substitute of exporting the white sugar, it’s extra worthwhile for the UP mills to promote their export quota at a premium. Thus, the UP mills have booked this premium on the sugar they have not produced but,” stated a dealer from the MNC commerce home, quoted above.

“Because the worldwide market is nice, it’s accepted that the one who sells the export quota will ask for share within the income that the exporter will make,” stated a number one sugar miller from Uttar Pradesh.