BL: Biggest Sugar Buyer to Turn Exporter as Supply Gains (Update1)
By Prabhudatta Mishra and Pratik Parija
May 3 (Bloomberg) -- India, the biggest sugar buyer, may become a net exporter next year as output is likely to exceed demand for the first time in three years, pressuring prices.
“Forget about imports, we will be in a position to export next year,” Farm Minister Sharad Pawar said in an interview today. Production “may exceed” annual demand of about 23 million metric tons, he said.
India became a net buyer of the commodity since 2008 after sugar cane growers switched to planting wheat and oilseeds, and last year’s drought ravaged crops, pushing prices in New York to a 29-year high in February. Increased production from the Asian country may weigh on prices that have plunged 43 percent this year on bets that rising supplies will erase a global deficit.
Raw sugar for July delivery rose 0.4 percent to 15.21 cents a pound in after-hours trading on ICE Futures U.S. Futures lost 8.7 percent in April for a third straight monthly decline, the longest slump since 2008, amid bets global output will rebound.
Global sugar production may exceed demand by 6 million tons in 2010-11, the first surplus in three years, Sucres et Denrees SA said April 30. The International Sugar Organization forecasts an 8 million-ton shortfall in the 12 months ending September.
Cane plantings in the nation’s main growing states of Uttar Pradesh, Maharashtra and Karnataka have been “very good,” said Pawar at his office in New Delhi.
India, the biggest producer after Brazil, may halt imports as output this year may top an industry forecast, Vivek Saraogi, managing director at Balrampur Chini Mills Ltd., the nation’s second-biggest producer, told analysts today.
Imports Double
Mills and traders have imported about 3.5 million tons in the season that started Oct. 1, more than twice the amount from a year ago, Narendra Murkumbi, managing director of Shree Renuka Sugars Ltd., India’s top refiner, said in an interview April 29. Purchases in the next six months may not exceed 1 million tons as traders hold off imports amid falling local prices, he said.
Prices in Mumbai, India’s biggest wholesale market for the commodity, have fallen 29 percent from a record 4,050 rupees per 100 kilograms on Jan. 8 after the government extended duty-free imports of white sugar until Dec. 31.
The government will consider reinstating the tax only after assessing cane production, Pawar said today.
To contact the reporters on this story: Prabhudatta Mishra in Mumbai at pmishra8@bloomberg.netPratik Parija in New Delhi at pparija@bloomberg.net
Last Updated: May 3, 2010 07:54 EDT
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