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Indian Traders Selling Old Season Sugar To Iran

17 Oct 2019 7:49 pm
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MUMBAI (Commoditiescontrol) - Indian mills are aggressively selling old season sugar to Iran after India announced a subsidy to help cash-strapped mills export a surplus, as per sources.

Trading houses have contracted to export to Iran about 350,000 tonnes of sugar for shipments landing in October to December at about Rs 21,600 (USD 302) a tonne on a free-on-board basis, the trade sources said this week.

They have contracted another 150,000 tonnes for destinations like Sri Lanka, Afghanistan and African countries at around USD 315 per tonne for shipments in the last quarter of 2019, they said.

Under US sanctions, Iran is blocked from the global financial system, including using US dollars to transact its oil sales. Iran agreed to sell oil to India in exchange for rupees but it can only use those rupees to buy Indian goods, mainly items it cannot produce enough of domestically.

With exports, mills are creating space for new season production and raising money to buy cane from farmers.

India has approved a subsidy of Rs 10,448 per tonne to export 6 million tonnes of sugar in the 2019/20 marketing year that started on October 1.

But trading houses are expecting the country to export around 4 million tonnes due to a drop in global prices.

India is expected to start the new marketing year with carryover stocks of 14.2 million tonnes, the government says.

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