India Extends, Increases Sugar Imports
25 January 2010 NEW DELHI, India — India, the world’s biggest sugar consumer, will increase refined sugar imports due to the country’s processing capacity for the raw variety failing to meet demand, according to Bloomberg. After domestic prices reached the highest level since July 2005, India extended a duty exemption
on imports of refined sugar. Previously, only raw sugar could be imported at zero duty until Dec.31, with a special exception for refined sugar only up until March 31. However, the Cabinet Committee on Prices (CCP) decided on Jan.13 to extend duty-free imports of refined, or white, sugar through Dec.31 as well. CCP also suspended the condition requiring the processing of raw sugar by the same mill that contracted the imports, enabling top cane producing state Uttar pradesh to have raw sugar they’ve imported processed outside the state. Uttar Pradesh had previously banned mills from processing
the raw variety until they finished crushing local cane, in order to help farmers get a higher price. This rule, which worsened India’s refined sugar shortage, was relaxed last week.
Mills have contracted to buy 2.9 million tons of raw and 900,000 tons of white varieties in the year started Oct. 1, the New Delhi-based Indian Sugar Mills Association (ISMA) said, up from 225,000 tons in the previous 12 months. About 900,000 tons of raw sugar is waiting at local ports, Farm Minister Sharad Pawar said Jan. 13. Dubai-based Al Khaleej Sugar Co., the world’s largest refiner, is forecasting India’s white sugar purchases to exceed 2 million tons this season. Al Khaleej sold 50,000 tons of refined white sugar to India in the 2008-09 season, according to General Manager Cyrus Raja.
Other nations planning to import sugar this year are Indonesia, Iraq, Egypt, Pakistan and Tanzania, which will strain global supplies. Prices more than doubled last year as excess rains in Brazil and drought in India hurt cane crops in the world’s biggest growers. Because of the increased demand, prices in London have recently risen to US$755 per ton, the highest since January 1989.
India’s sugar output this season will be “a little lower” than 16 million tons forecast previously, ISMA said, adding that it won’t be less than the 14.7 million tons posted in the previous year.
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