REPORTS

The news this morning is that the Indian Cabinet has approved the plan to stockpile 3 MMT of sugar and a minimum selling price of R 29 /kilo. It has also approved plans to grant millers soft loans to expand ethanol production and capacity.

In addition, this morning India increased interest rates from 6% to 6.25%. With the Indian Rupee strengthening on the back of the rise, it doesn’t help exports. Given that there are elections in India next year, the measures taken on sugar storage and minimum prices are also a political move to sweeten the voters among the farming community. The markets have so far reacted little, as overall there is still a large surplus expected despite this “withdrawing” of 3 MMT from the trade flows.