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Business News/ Opinion / Online-views/  India may import sugar as domestic output drops
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India may import sugar as domestic output drops

India may import sugar as domestic output drops

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Mumbai: India, a key supplier of raw sugar, may have to import sugar by 2010-11, a global consultancy said on Thursday, while a domestic brokerage said imports would happen sooner as domestic output drops.

Refineries around the world, especially in West Asia, started viewing India as a dependable supplier of raws as the country, saddled with huge domestic stocks, entered the raw sugar export market in June 2007, when it sold 500,000 tonnes.

After a record output of 28.4 million tonnes (mt) in the crop year to September 2007, output in India is likely to fall in the next two-three years as farmers shift from sugar cane to more profitable grains, traders said.

“India may have to import sugar in 2010-11 after exporting less in the next two seasons," said Gareth Forber, head of sugar research at LMC International Ltd. He said India’s exports were expected to fall to about 2.5mt next crop year, 1mt lower than the estimated 3.5mt this year.

India, the world’s biggest sugar producer after Brazil, exported 1.7mt last year. “India can manage to export some sugar in 2009-10 but may have to import in 2010-11," Forber said.

Praful Vithalani, who owns local brokerage Jagjivan Keshavji, said India would probably have to start buying sugar a year earlier. “India will have to import soon as production will start falling from next year, while demand will start rising due to rise in population and better living standard," he said. Vithalani said output was estimated at around 22mt in the year to September 2009, while domestic demand was likely to be 22-23mt.

Trade officials say India’s closing sugar stocks would be 9.8mt in September this year when the current season ends and will fall to 7.9mt next year. “The closing stock of 7.9mt will be enough to meet demand for only four months," Vithalani said. The government had allowed mills to import raw sugar between 2003 and 2004 butasked them to export refined sugar in the same quantity in lieu of duty-free imports of raws.

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Arpan Mukherji contributed to this story

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Published: 03 Apr 2008, 11:22 PM IST
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