India’s Sugar Import/Export Market in 2022: An Overview

Sugar Import in India has been growing at a fast pace during the past years, and this trend is expected to continue over the next eight years. Sugar import in India has been growing at a fast pace during the past years, and this trend is expected to continue over the next eight years. Sugar import in India accounts for around 10% of total sugar imports in Asia-Pacific region, which in 2015 was pegged at US$9 billion. This will further increase due to a growing demand in the Indian market due to changing lifestyle and increasing population of India which will drive growth of the sugar import market over the forecast period from 2016 to 2022.

 

Current scenario

Bulk sugar has a wide range of applications across food and beverage industries, catering to various end-user industries such as carbonated soft drinks, alcoholic beverages, dairy products and confectionery. Bulk sugar is also used in oil drilling activities. The current market scenario shows an upward trend of demand for bulk sugar with high imports recorded during 2013 – 2016. Imports accounted for nearly 54% share of total supply during 2016. The total production was 739 thousand tonnes (MT) during 2016 against exports of 169 MT leaving a net gap of 570 MT that were met through import from neighbouring countries such as Bangladesh, Thailand and Malaysia to name a few.

 

Factors driving growth of the market

The surge in global demand for Indian export sugar is owing to its competitive prices. The volume of exports surged by five percent to touch 4.6 million tonnes, which is a 10-year high. India’s leading exporters have gained market share across diverse regional markets such as Mexico, Central America, South Africa and Southeast Asia over recent years. Not only is India one of a handful of countries that export raw sugar; it also has a healthy inventory at its ports and holds strong chances of expanding export volumes from Brazil. To ensure smooth supply chains, large importers have built deep relationships with suppliers by signing long-term contracts—often spanning several years—and investing substantial amounts in infrastructure developments to facilitate ease of trade.

 

Factors hampering growth of the market

The other factor, hindering market growth, is fluctuation in prices. With India being a major producer of sugar, its import bill had gone down sharply during previous years, due to which exports are comparatively higher. However, with the government making moves towards reducing production to meet domestic requirements and ensure reasonable domestic supply without driving up prices and hampering consumers’ interest for sugar cane products globally, Indian sugar export price will be expected to rise by 4.50 percent to around $837 million by 2022 from $783 million in 2017. All these factors will act as opportunities for players operating within India’s sugar import/export market over the forecast period 2017-2022.

 

Opportunities and future potential

India’s rapid growth and changing lifestyle patterns have led to an increased demand for commodities, including sugar. The country has also seen a rise in disposable income, resulting in higher per capita spending on non-essential items such as confectionery, beverages and tobacco. This positive trend is expected to continue during 2016–2022. A growing population will contribute to a rise in demand over time; however, supply constraints caused by rising domestic production costs might limit market growth. Furthermore, rising urbanization and globalization of Indian business will play a vital role in development of new opportunities for local Indian sugar manufacturers.

 

Competitive landscape

Despite India being one of Asia’s largest sugar producing nations, it is also one of its largest importers. For that reason, projections for demand growth over coming years are extremely high. Specifically, some analysts expect demand to reach 12.5Mt by 2021-22 and 28Mt by 2026-27 at CAGR 4% respectively. This large appetite for sugar is due to increasing GDP per capita coupled with government intervention with subsidized sugar production through imports. Sugar import in India is done through two channels namely STC (State Trading Corporation) and open market transactions with other countries.

 

Original Source: https://blog.tradologie.com/indias-sugar-import-export-market-in-2022-an-overview/

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