Commodity Profile for Sugar, July, 2019

(1)

1

C o m m o d i t y P r o f i l e o f S u g a r f o r M a y , 2 0 1 9

(As on 2.7.2019)

Commodity Profile for Sugar, July, 2019

Contents

1. Sugar Estimates for India...

2. World Sugar Estimates ... 2

3. Production, Area under cultivation and Yield of Sugarcane and Sugar ... 3

4. Major Sugar Producing Countries of world ... 3

5. Major Exporting and Importing Countries of Sugar... 4

6. India’s Major Export Destinations and Imports Sources ... 5

7. Trade Flow for India ... 6

8. Movement of Domestic as well as International Price of Sugar ... 6

9. Futures prices ... 7

9.1 Sugar Future Prices ... 7

9.2 Prices of Sugar in Bench Mark Domestic Markets ... 7

10. State Advised Cane Price ... 8

11. Trade Policy ... 8

11.1 Export Policy ... 8

11.2 Import Policy ... 9

(2)

2

1. Sugar Estimates for India (Crop Year: October 2018 to September 2019)

(Unit: Lakh Tonnes)

Table 1: Sugar Production, Trade, Consumption and Availability

2016-17 2017-18 Particular 2018-19 (P) Source

77.1 39.37 Opening Stock NA^ DoF&PD

202.27 321.96 Production 321.96 DoF&PD

14.22 19.56 Total Imports 14.87* DoC

293.59 380.89 Availability NA @ -

29.7 27.86 Total Exports 39.18* DoC

245 252 Consumption 252 DoF&PD

39.37 101.03 Ending Stock NA # DoF&PD

Source: Department of Food & Public Distribution (DoF&PD), Department of Commerce (DoC)

For preparing provisional balance sheet for 2017-18 production and consumption have been taken from balance sheet of Department of Food& PD. Export and Import taken as last three years’ average.

Availability: opening stock in central pool plus production plus Total Imports;

Total Availability for Domestic Consumption: Availability minus (total export plus ending stock in central pool).

^Month wise opening stock is not maintained.

*: The figure of export and imports for Apr- July, 2018-19.

@ Final Crop of 2018-19 yet to arrive. Therefore, actual data is awaited.

# Actual ending stock data will be available at the end of the year.

2. World Sugar Estimates (2018-19)

(Unit: Lakh Tonnes)

Table 2: World Sugar Production, Consumption, Trade and Stock

Particular 2016-2017 2017-2018 2018-2019 2019-20*

World Production 1740.3 1944.96 1789.26 1807.32

Human Consumption 1708.16 1735.84 1739.52 1764.49

Total Import 543.52 546.88 510.67 513.17

Total Export 586.81 644.98 564.42 577.27

Ending Stock 422.04 522.45 509.01 478.36

Source: United States Department of Agriculture, *Estimated

 Estimates shows that world sugar production has been increasing since 2016-17 till 2017-18. However, the production is expected to increase in 2019-20 season.

(3)

3

3. Production, Area under cultivation and Yield of Sugarcane and Sugar

Crop/marking Area Production (Lakh Tonnes)

Sugarcane Yield (Tonnes/Hectares) Year (lakh Hectares) Sugarcane Sugar

2009-10 41.7 2923 188 70.02

2010-11 48.8 3423.8 243.5 70.09

2011-12 50.4 3610.4 263.4 71.67

2012-13 49.99 3412 258.5 68.25

2013-14 50.12 3521.4 245.5 70.52

2014-15 50.66 3623.85 284.63 71.51

2015-16 49.6 3484.48 251.21 70.72

2016-17 45.17 3060.69 202.27 69.88

2017-18 47.32 3799.05 321.96 74.65

2018-19 50.44 4003.69* 312.00# 75.50

Source: Department of Food & Public Distribution (for Sugar Production) and Agricultural Statistics (for production and area of Sugarcane).

*: As per 3^rd Advance Estimate Agricultural Statistics Division (03.06.2019)

# Oct-Apr (2018-2019)

 India’s sugar production has increased in last 10 years at CAGR of 8.17 percent.

 During the same period, India’s sugarcane production has increased at CAGR of 2.91 percent and area under cultivation at CAGR of 0.68 percent.

4. Major Sugar Producing Countries of world

Source: United States Department of Agriculture

 India is the 2^nd largest producer of sugar in the world after Brazil in 2017-18 but this year due to robust sugar production in India lead the way in 2018-19 sugar season.

 India’s share in the world production of sugar was 22 percent in 2017-18.

0 50 100 150 200 250 300 350 400

Brazil India European Union

Thailand China United States

Mexico Russia Pakistan Australia

Lakhtonnes

Figure 1: Major Sugar Producing Countries

2017-2018 2018-2019 2019-20

(4)

4

5. Major Exporting and Importing Countries of Sugar

Source: Comrade

 Brazil was the largest exporter of sugar followed by Thailand and Australia in 2018-19.

 In 2017-18, India was the sixth largest exporter of sugar having a share of 3.44% in total global exports whereas it increased to 8.66% in the ongoing season till March.

Source: Comtrade

 Indonesia, China, USA, UAE, Bangladesh, Algeria, Malaysia were the major sugar importing countries in the world in 2018-19.

0 50 100 150 200 250 300

Quantity (Lakh MT)

Figure 2: Major Sugar Exporting Countries

2016-2017 2017-2018 2018-2019

0.0 10.0 20.0 30.0 40.0 50.0 60.0

Quantity (Lakh MT)

Figure:3 Major Sugar Importing Countries

2016-2017 2017-2018 2018-2019

(5)

5

6. India’s Major Export Destinations and Imports Sources

Source: Department of Commerce

 The major export destinations for India in 2018-19 are Sudan, Myanmar, Sri Lanka, Somalia, UAE, & Jordan.

 The highest growth in India’s sugar export was for Sudan in 2017-18 compared to previous year as well as highest in the current on going season.

Source: Department of Commerce

 Substantial part of India’s sugar imports came from Pakistan in 2017-18 followed by Germany. India imported negligible amount of sugar during the same year from Italy, USA, UAE, Denmark & UK.

0 500 1000 1500 2000 2500 3000

Value in Rs. crore

Figure 4: Major Export Destination

2016-17 2017-18 2018-19 2019-20*

0 500 1000 1500 2000 2500 3000

GERMANY ITALY U S A PAKISTAN IR

DENMARK JAPAN U ARAB EMTS

U K BRAZIL

Value in Rs. Lakh

Figure 5: Major Importing Sources

2016-17 2017-18 2018-19 2019-20

(6)

6

C o m m o d i t y P r o f i l e o f S u g a r f o r M a y , 2 0 1 9 7. Trade flow of India

(Unit: Lakh Tonnes) Table 4: Trade Flow for India during 2013-14 to 2019-20

Year Export Import

2013-14 24.58 8.80

2014-15 19.48 15.38

2015-16 38.17 18.87

2016-17 24.76 21.44

2017-18 17.27 24.01

2018-19 39.76 14.88

2019-20(April) 5.74 0.00

Source: Department of Commerce.

 Trade figure shows, that India has been exporting more sugar than that of its import since 2012-13.

 This sugar season India has exported the maximum quantity since past 6 six years.

8. Movement of Domestic as well as International Price of Sugar

Source: Agmarknet (for Domestic price), London International Financial Futures Exchange (LIFFE) (for international price)

 The international prices of sugar has been lower than domestic price from 2017-18 till now.

 Domestic sugar prices hovering below or at minimum support price in the recent past few months in view of surplus production sugar in major producing states and lower demand due to arrival in monsoon.

 Sugar mills across the country have produced 328 LT of sugar till June 30^th, and expected to reach 330 LT this season, said a release from the Indian Sugar Mills Association (ISMA).

20000 25000 30000 35000 40000

Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 Jan/16 Feb/16 Mar/16 Apr/16 May/16 Jun/16 Jul/16 Aug/16 Sep/16 Oct/16 Nov/16 Dec/16 Jan/17 Feb/17 Mar/17 Apr/17 May/17 Jun/17 Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May/18 Jun/18 Jul/18 Aug/18 Sep/18 Oct/18 Nov/18 Dec/18 Jan/19 Feb/19 Mar/19 Apr/19 May/19 Jun/19

Comparison Between Domestic Sugar Prices & International Sugar Prices (In Rs./Ton)

Domestic Sugar Prices (All India Average) International Refined Sugar Prices (LIFFE)

(7)

7

9. Futures prices

9.1 Sugar Futures Price

Table-5: Sugar Futures Price (Raw Sugar) (Rs/Qtl)

Futures month % Change over previous year

Today Week ago Month Ago

Year Ago

RBI Dollar 15-Jul-

19 8-Jul-19 15-Jun-19 16-Jul-

18 15-Jul-19

19-Jul 9.48 2051.45 2091.00 NA 1857.00

69.6

19-Oct 7.61 1851.84 2115.00 NA 1711.00

20-Mar 12.73 2014.60 2065.00 NA 1758.16

Source: Intercontinental Exchange (ICE), New York

Table 6: Sugar Futures Price (White Sugar) (Rs/Qtl)

Futures month % Change over previous year

Today Week ago Month Ago Year Ago RBI Dollar

15-Jul-19 8-Jul-19 15-Jun-19 16-Jul-18 15-Jul-19

19-Aug 0.294861 2374 2429 NA 2367

69.6

19-Oct -12.4069 2015 2210 NA 2265

20-Dec 0.089206 2242 2304 NA 2240

Source: London International Financial Future & Option Exchange (LIFFE)

 Future Prices of sugar (raw sugar as well as white sugar) are expected to increase over the previous year as shown in the Table 5 & 6 because Brazil has increased its sugar production towards ethanol diversion up from previous year. Also the Indian crop is expected to decrease due to irregular and insufficient rainfall this year.

9.2 Prices of Sugar in Bench Mark Domestic Market

(Unit: Rs/ Quintal) Table 7: Prices of Sugar in Bench Mark Domestic Market

Centre % Change over previous year

Today Week ago Month Ago Year Ago 16-Jul-19 9-Jul-19 16-Jun-19 16-Jul-18

Sugar S Grade

Kolhapur -0.38 3101 3100 N/A 3113

Sugar M Grade

Delhi -2.87 3215 3195 N/A 3310

Kanpur -3.88 3269 3265 N/A 3401

Kolhapur -1.87 3148 3146 N/A 3208

Kolkata -2.05 3400 3391 N/A 3471

Muzaffar Nagar -4.75 3185 3198 N/A 3344

*NA: Not Available

Source: National Commodity & Derivatives Exchang e Limited (NCDEX)

 Domestic prices of sugar in major markets in July, 2019 are lower compared to same period in the previous year.

(8)

8

C o m m o d i t y P r o f i l e o f S u g a r f o r M a y , 2 0 1 9 10. State Advised Cane Price

(Unit: Rs/Tonnes) State 2013-14 2014-15 2015-16 2016-17 2017-18

All India (FRP) 2100 2200 2300 2300 2550

UP 2800 2800 2800 3050 3150

Maharashtra NA NA - 2375 -

Punjab 2800 2850 2800-2950 2900 2900

Haryana 2950 3050 3000-3100 3200 3300

Gujarat NA NA - - -

Andhra Pradesh 2600 NA 2360-2400 - -

Karnataka 2500 2500 2300-2625 2300-3050 -

Tamil Nadu 2650 2650 2850 2850 -

Source: Agriwatch NA: Not Available

11. Trade Policy

 Export Policy: Export duty of 20% imposed on sugar vide Department of Revenue Notification No. 37/2016-Customs dated 16/06/2016 has since been removed vide Customs Notification 30/2018-Cus,dt. 20-03-2018.

Table 9: Export Policy

HS Code Item Description Export Policy Nature of Restriction

17010000 (a) Sugar* Free

(b) Preferential Quota Sugar to EU under CXL Quota

Free The Certificate of Origin shall be issued by Additional DGFT, Mumbai. The exporters shall be required to furnish the details of actual exports (viz. quantity, value, destination, name & address of foreign buyer etc) to the Additional DGFT, Mumbai as well as to APEDA, New Delhi. This will be subject to quantitative ceiling notified by DGFT from time to time.

(c) Sugar to USA under TRQ

Free The quota will be operated by APEDA, New Delhi as per the modalities and operational guidelines to be notified by APEDA. The exporters shall be required to furnish the details of actual exports (viz. quantity, value, destination, name & address of foreign buyer etc) to APEDA, New Delhi. Certificate of Origin, if required, shall be issued by Additional DGFT, Mumbai. This will be subject to quantitative ceiling notified by DGFT from time to time.

Source: Directorate General of Foreign Trade (DGFT), Department of Revenue

*: Export of Pharmaceutical Grade Sugar would not be subject to registration requirement.

Export of organic sugar without any quantity limits, is permitted till the time export of sugar is “Free”. Such export is subject to following conditions:

(9)

9

 Sugar should be duly certified by APEDA as being organic sugar;

 Prior registration of quantity with DGFT through online system has been dispensed with vide Notification No. 20/2015-20 dated 7^th September, 2015.

Import Policy: The current applied duty on import of all types of sugar is 100%.

Source: Directorate General of Foreign Trade (DGFT), Department of Revenue and World Trade Organisation (WTO).

# Applied duty on sugar was increased from 50% to 100% vide Notification No. 24/2018-Customs dated 6 th February, 2018.

##Duty Free Import Authorization Scheme shall not be available for imports of raw sugar vide DGFT’s notification No. 5/2015-20 dated 1st May, 2015.

 The requirement of registration of quantity with DGFT for export of sugar has been dispensed with vide DGFT’s Notification No. 20/2015-20 dated 7.9.2015.

12. Signification Changes for the Month: NIL.

Disclaimer: The information and opinions contained in the document have been compiled from various sources believed to be reliable. This Department will not be liable for any losses and damages in connection with the uses of the information provided in the commodity profile.

****

Table 10: Import Policy Exim

Code

Item Description Import Policy

Bound Duty

Standard Duty

Applied Duty#

1701 Cane or Beet Sugar and Chemically Pure Sucrose In Solid Form

1701 12 00 Beet sugar Free 150% 100% 100%

1701 13 Cane sugar specified in Subheading Note 2 to this Chapter:

1701 13 10 Cane jaggery Free 150% 100% 100%

1701 13 20 Khandsari sugar Free 150% 100% 100%

1701 13 90 Other Free 150% 100% 100%

1701 14 Other cane sugar:

1701 14 10 Cane jaggery Free 150% 100% 100%

1701 14 20 Khandsari sugar Free 150% 100% 100%

1701 14 90 Other 150% 100% 100%

1701 91 00 Refined sugar containing added flavouring or colouring matter

Free 150% 100% 100%

1701 99 Other:

1701 99 10 Sugar cubes Free 150% 100% 100%

1701 99 90 Other Free 150% 100% 100%

1701 12 00 Beet sugar Free 150% 100% 100%