Indian mills are holding off on signing new sugar export contracts for the upcoming season as a rally in domestic prices to a 4-year high widened the gap between local and global rates, industry officials told Reuters. "Mills are not signing export contracts, as they are getting far higher prices in the local market," said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd. Lower shipments from India could support global prices, as supplies from top producer Brazil are expected to decline, and traders were banking on India to compensate for the shortfall.
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India's sugar inventories have been depleted by 19% and the country could start the 2021/22 marketing year with lowest the stocks in four years after mills exported a record amount in the current year, a leading trade body said on Wednesday. Lower inventories could support local prices and may reduce exports in the next marketing year from the world's second biggest sugar producer, in turn supporting global prices. India could start 2021/22 marketing year on Oct. 1 with carry forward stock of 8.7 million tonnes, down from 10.7 million tonnes a year ago, the Indian Sugar Mills Association (ISMA) said in a statement.