Prospects of Exporting Sugar from India

Sugarcane farming employs some 50 million farmers in India. The country is also the largest consumer of sugar with mills producing 268.21 lakh (26,821,000) tons of sugar between October 1, 2019 and May 31, 2020. Sugar mills have exported around 2.76 lakh tons of sugar between October and November 2021 and the maximum shipments have been made to the UAE. This figures have been provided by trade body All India Sugar Trade Association (AISTA). Other countries where maximum exports of sugar were made include Indonesia, Afghanistan and Somalia.

India is the second largest sugar producing nation after Brazil and also a top sugar exporting country. It enjoys a distinct advantage geographically, as it is landlocked with Pakistan, Nepal, and Bangladesh. All these neighboring countries are regular importers of sugar from India. Other countries having a market for Indian granular sugar include Sri Lanka and Indonesia.

Sugar export from India

In India, the free market prices of sugar have always been high due to the dual Sugar Pricing policy, and the government had enforced an Act way back in 1958 called the Sugar Export Promotion Act, to boost exports. As part of the act, the exports were routed through either the State Trading Corporation of India (STC) or the Indian Sugar General Import Export Corporation (ISGIEC).

We have come a long way since then and the Indian Government has fixed a mandatory export target of 60 lakh ton surplus sugar for the ongoing 2020-21 season. Prospects of export of bulk sugar from India is looking good for the upcoming season. The international price of this commodity is at a four year high and this has increased the enthusiasm of the industry.  The current price of 20 cents/pound for raw sugar is expected to get translated into ex-mill realization of Rs 3,100-3,150 per quintal for raw sugar.

Indian sugar mills are enjoying good export margins due to drought in Thailand and diversion of sugarcane to produce ethanol in Brazil.  The slowdown in sugar production from the two largest exporters of the product have impacted the prices of sugar, which have gone up by almost 60 percent to 65 percent in the last eight to nine months. The international market for sugar is lucrative and you can make the most of the favorable conditions to start your own export business in this commodity.

Export of organic sugar without any quantity limits is permitted in India subject to the sugar duly certified by APEDA and prior registration of quantity with DGFT (Directorate General of Foreign Trade) through online system.                

The steps to export sugar

Want to start exporting sugar? Follow the steps mentioned below:

  • Create a company with a name and logo
  • Open an account in a bank that can deal in foreign exchange
  • Keep your PAN number handy.                             
  • Obtain an Importer-Exporter Code (IEC) Number, mandatory to export/import in India
  • Get Registration cum membership certificate (RCMC) to avail authorization to import/export
  • Make a list of overseas markets where you would want to export depending on the size of the market, quality specifications, and options for payments.
  • Find buyers of sugar online. Or, you can do this by being a part of trade fairs, exhibitions. Or, you can connect with – the world’s first next generation global B2B platform to trade with global buyers.
  • Provide samples according to specifications of buyers.
  • Create export costing after taking into account all expenses pertaining to sampling and realization of export proceeds. The objective is to sell maximum quantity at industry leading costs, while maintaining profit margins. 
  • Negotiate with buyers and provide price discounts depending on continuity of business relationships in future.
  • Safeguard against payment risks due to buyer/country insolvency by procuring credit limit on foreign buyers from Export Credit Guarantee Corporation Ltd (ECGC), in instances when buyers are not making advance payments.
  • Initiate a formal contract with the global buyer.
  • Procure the goods for export – in this case sugar according to the buyer’s requirement.
  • Carry out pre-shipment inspection to maintain quality and sustain yourself in export business.
  • Label, package, pack and mark the goods according buyer specifications. Ensure that the products are easy to handle, and easy to load.
  • Ensure that the consignments are delivered efficiently. 
  • Avail the services of Customs House Agents licensed by the Commissioner of Customs to get clearance of cargo from customs.
  • Ensure that a few mandatory documents needed to carry out export import are in order. These include Contract/Purchase Order, Packing List, Test Certificate/Quality Certificate, Fumigation Certificate, Phytosanitary Certificate, Bill of Lading (2 Original and 2 Non-negotiable), Certification of Origin, and Shipping Bill.
  • Submit documents to bank after shipment within 21 days for onward dispatch to foreign bank and arrangement of payments.

Follow these simple steps to export sugar or for that matter any other product of your choice and realize export proceeds in freely convertible currency of Indian rupees.