NEW DELHI (Reuters) - A ministers’ panel will review sugar exports on March 26, a government source said on Tuesday, raising hopes of more overseas sale of the sweetener from the world’s second-biggest producer that could put pressure on global prices.
India, the world’s largest consumer of sugar, has already allowed 2 million tonnes of sugar exports in the year from October 1 and expects output to far outstrip demand.
Indian sugar mills produced 21.2 million tonnes between October 1 and March 15, up 14 percent from a year earlier, data from an industry body showed.
The total output is expected to top 25 million tonnes while demand is estimated at around 22 million tonnes for the year.
The government is considering allowing further 500,000 tonnes to 1 million tonne of unrestricted sugar exports.
“An empowered group of ministers will take a call on the issue of more exports under the Open General Licence (OGL) scheme on Monday after reviewing the output scenario,” said another government source.
Global raw sugar prices, which hit a three-week high on Tuesday on investor and fund buying, could come under downward pressure from extra supplies from India.
May raw sugar on ICE was up 1.4 percent at 26.02 cents a lb at 1226 GMT, having earlier touched a high of 26.20 cents on talks of lower-than-expected production from Brazil, the world’s top producer.
Separately, sources said the panel could allow more exports of common grades of rice and wheat given the country’s huge grain stocks following bountiful harvests in the past few years.
India is the world’s second-biggest rice and wheat producer.
Reporting by Ratnajyoti Dutta; editing by Malini Menon