REPORTS

News out of India confirming that the government has abolished its 20% tax on exports was probably the reason for the drop back down . With cane arrears at record levels, a very large production expected and weaker domestic prices as a result, the pressure is on to export some of the surplus. The demands by the millers for government to go further and subsidize exports grow louder and the take on this expected development is that more sugar will be available to the world market and that the tradeable surplus will increase, especially of LQ White sugar. This will compete with exports from Pakistan and refined exports in the MENA region assuming that subsidies are announced. At present the numbers do not add up and all this does is put a firmer cap on any potential rally in the market.