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| Sugar price 'out of reach' for imports |
| Bloomberg / Aug 06, 2009, 00:41 IST |
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Sugar mills in Maharashtra, India’s biggest producer, will delay imports as a surge in global prices to a three-year high has made overseas purchases unprofitable, a producers’ group said.
“Global prices have gone beyond our reach,” said Prakash Naiknavare, managing director of Maharashtra State Cooperative Sugar Factories Federation. “We’ve put our import plans in cold storage for the time being. Either global prices have to move down or local prices have to rise sharply.”
Raw-sugar jumped to a three-year high in New York on Wednesday and white sugar traded in London reached the highest since 1989 as falling production in India, the world’s largest user, helped to widen a global deficit. Domestic prices have jumped to a record.
Mills in Maharashtra require at least 1 million tonnes of raw sugar in the year starting October 1 to fill a production gap, said Naiknavare, whose group of 190 producers account for a third of the country’s total output.
Maharashtra reduced its production forecast to 4.6 million tonnes for next year from 5 million tonnes predicted in June. The state may crush 41 million tonnes of cane, down 9 per cent from a year earlier from November 1, Naiknavare said.
“India will remain an importer even in 2010-11,” he said.
Below-average monsoon rainfall in July 2008 reduced yields, turning India into a net importer for the first time since 2006. Output may drop 44 per cent to 14.7 million tonnes in the season ending September 30, the Indian Sugar Mills Association has said.
Supplies may be “relatively comfortable” if production this year totals 17 million tonnes, Naiknavare said.
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