InvestorQ : How will India compete against Brazil and Thailand this year for sugar exports?
Neelam Naik made post

How will India compete against Brazil and Thailand this year for sugar exports?

Answer
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Anu Biswas answered.
2 months ago


Before we understand what role Brazil and Thailand played, you must remember that the inventory levels have caused a glut in the market The export of 5.50 million tonnes this year will help to alleviate that inventory. India has a closing inventory of nearly 14MT.

Last year, the government of India for the first time had announced subsidies for Indian sugar companies to encourage exports as their cost structures are higher than Brazil and Thailand. That raised the hackles at WTO, but it was more of a business decision.

Interestingly, events at Brazil and Thailand also helped the cause. Two of the three largest producers of sugar are having trouble. Sugar production in Brazil was hit badly by the pandemic and most dispatches from Brazil are getting delayed by nearly 45-60 days.

Secondly, look at Thailand. Its sugar output got badly hit by drought reducing its sugar output by over 10% this year. Many countries that bought sugar from Thailand like Indonesia, Iran, Vietnam, Kenya and Bangladesh have placed sugar import orders with India.

Export promotion is good but India must address a bigger challenge. It must find alternate applications for sugarcane like Brazil does. For example, 46% of Brazil cane output goes to fuel mixing. That could be more productive and environment friendly in the long run.