India's Shree Renuka to start sugar exports from Haldia unit
Top Indian sugar refiner Shree Renuka Sugars Ltd aims to soon begin exporting white sugar from its H…Top Indian sugar refiner Shree Renuka Sugars Ltd aims to soon begin exporting white sugar from its Haldia unit on the country's east coast to cash in on strong demand during the Ramadan festival and limited supplies in Asia amid a weak rupee.
Higher white sugar exports by Indian companies may help bring down the sweetener's premiums that have surged on Ramadan demand and limited supplies from Asian exporters like Pakistan.
"Right now exports demand is very strong. Returns from exports are higher. So we will be shortly commencing exports from Haldia refinery," Narendra Murkumbi, managing director of Shree Renuka Sugars, told Reuters in an interview on Thursday.
The company has been exporting whites from its Kandla refinery on the west coast. It re-started the Haldia refinery in October last year to cater to the local market, but right now overseas markets were giving better returns, Murkumbi said.
To take advantage of hefty white-over-raw premiums, which measure refining profitability, Shree Renuka is planning to refine 1.5 million tonnes of raw sugar in the year ending March 31, 2014, compared to about 1 million tonnes a year earlier, Murkumbi said.
The premium is hovering around $130 a tonne, compared to $100 two months back. "Our expectation is premium would remain strong in the rest of the calendar year because it is off season in Asia. Thai production would be available for exports only from December," he said.
Exports of sugar produced from locally grown cane is also possible due to the weak rupee and the company has started exports from its factories in Karnataka, he said.
Indian traders have signed deals to export 75,000 tonnes of white sugar in July, reversing an imports trend after the rupee's depreciation and with strong demand in Gulf and African states.
During the Muslim fasting month of Ramadan, which starts this year on July 9, consumption of sugar rises because it is used to make traditional confectionaries eaten at night.
A fire at Saudi food company Savola Group's United Sugar Co in Jeddah in June has squeezed whites supplies in Asia, dealers said.
LUCRATIVE ETHANOL
Shree Renuka used 63 percent cane to produce sugar and the rest was used for ethanol production at its units in Brazil in 2012/13.
This year the company is planning to allocate 45 percent cane for sugar production and the remaining would be used for the production of biofuel as ethanol was more lucrative, Murkumbi said.
"This year we are prioritising production of ethanol. Ethanol prices in Brazil are higher than sugar exports prices," he said.
Per hectare cane yield, which was hurt by drought in Brazil last year, is likely to rise this year on conducive weather and will allow Shree Renuka to crush higher cane, Murkumbi said.
"Right now (cane) yields are better than long term average in Brazil. Last year we crushed 9.5 million tonnes. This year we expect (to crush) more than 11 million tonnes," Murkumbi said.
