India's bid to compel producers to export millions of tonnes of surplus sugar will fail without significant subsidies or at least penalties for failing to comply, trade and industry sources said on Friday.
India has been pushing mills to sell sugar on the international market and use the proceeds to clear huge debts they owe farmers for sugarcane.
The world's number two producer, announced new rules last month making it compulsory for sugar producers to increase exports to at least 4 million tonnes in the present crushing season, to cut stockpiles.
Despite a rally in raw sugar futures to a 4-1/2-month peak this week, driven by a Brazilian gasoline price rise which was expected to boost demand for cane-based ethanol, raw sugar futures prices were still below the 13.5-14 cents per pound area seen as more likely to spur Indian exports.
Oct 4, 2015