Indian Sugar Stock Impacts Global Markets

Indias sugar stockpile, built up through the production boost of 1996, currently hangs over the world market, the head of the economics and statistics division of the International Sugar Organisation said here on Wednesday.

A further increase in (Indian) production to 17 million tonnes in 1996 led to a further large build-up of stocks, largely instrumental in the posting of a world surplus of 5.9 million tonnes in 1995/1996, Tony Hannah told the F O Licht World Sugar and Sweetners Conference.

That this significant surplus, equivalent to 20 per cent of the world market, did not effect prices to the extent expected is attributed to the fact that it was largely locked up in India and unexportable, Hannah said. Nevertheless, it exists and is overhanging the world market currently. Hannah said Indias up-down supply and demand levels have been of such dimensions that the country appears on both supply and demand sides of any world market assessment.

Having imported 2.6 million tonnes in 1994, the worlds biggest importer that year, India increased production so rapidly that it had a surplus of 1.4 million tonnes in 1995, he said.