New Delhi: India is likely to import a record 4.5 million tonnes of sugar in 2009/10, a jump of 80% over the previous season, as the cane crop contracted for a second straight year, a Reuters poll forecast on Wednesday.
Estimates ranged from a low of 2.8 million to 3.0 million tonnes forecast by some European trade sources and Shree Renuka Sugars, India’s biggest refiner and importer of raws, to a high of 5 million tonnes projected by the International Sugar Organisation, Sucden and Morgan Stanley.
India, the world’s top consumer and the biggest producer after Brazil, has contracted to import about 2.5 million tonnes of raws in 2008/09, helping drive up benchmark New York raw sugar to multi-year highs this year.
India’s sugar marketing year runs from October to September.
White sugar futures hit a record high and raw sugar touched a 3-1/2-year peak for a second day on Tuesday, buoyed by strong Indian demand prospects and concern over slow cane harvesting in top grower Brazil.
Weak monsoon rains have hurt the cane crop in the main cane producing regions and local officials said on Tuesday that western Maharashtra state, India’s top refined sugar producer, would start cane crushing a month later than usual, further delaying the replenishment of the country’s depleting sugar stocks.
India, which allowed duty-free imports of raws in February, said on Monday mills could buy tax-free raws without an obligation to export an equal quantity of whites until March.
The government also allowed state-run firms and private firms to buy whites at zero duty before 30 November.
Domestic sugar prices have risen but are not yet high enough to make imports attractive.
“At current prices, they (India) are going to keep it (imports) as low as they can,” said Alex Oliveira, a senior analyst with Newedge in the United States.
India would also rely on sugar shipped in this season to limit imports, he added.
Shree Renuka Sugars, recently said that of 2.5 million tonnes of raws contracted, 1.3 million would be refined in the year to September and the rest in the next season.
In a recent research report, Morgan Stanley said India was expected to import 5 million tonnes in the next season.
London-based International Sugar Organization (ISO) agreed.
“I don’t think 5 million tonnes is out of question,” Sergey Gudoshnikov, a senior economist with the ISO, said.
Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories Ltd, said mills were keeping an eye on domestic cane output and current trends suggested the country was on course to import around 5 million tonnes.