New Delhi: India’s three state-run trading firms have imported 400,000 tonnes of sugar since April, when the country allowed tax-free purchases of the sweetener, government sources said on Wednesday.
The government had last year allowed the State Trading Corp of India Ltd, MMTC Ltd, and PEC Ltd to import up to 1 million tonnes of whites and later removed the ceiling.
The companies have also been importing raw sugar on behalf private refiners. The officials said the three firms have imported 200,000 tonnes each of raws and whites since April.
India, the world’s top consumer and the biggest producer behind Brazil, has sealed deals to import 7 million tonnes of sugar since 2009, of which, traders say, 5 million tonnes have arrived.
But the pace of imports have slowed now.
“Traders say import deals are not taking place due to high global prices. But when prices were relatively moderate in December, there were only a handful of deals,” a government source said.
He said mills would prefer to wait until March to get a firm idea about the 2009-10 output before making overseas purchases.
As weather conditions hit output in top producers Brazil and India, benchmark prices of raw sugar in New York <SBc1> hit a 29-year peak of 30.40 cents per lb on Monday.
Prospects of Indian demand of whites, or refined sugar, pushed London-traded futures to a record high of $767 per tonne on 21 January.
Dealers said the sugar market was expected to remain tight for at least another couple of months, although the supply crunch should ease slightly later this year as the new centre-south Brazilian harvest comes onstream.
A Reuters poll showed sugar prices will reach historic highs by end-March as a global supply shortage tightens its grip on the market and increases investor fervour for the sweetener.
In its effort to rein in domestic prices, the government would extend the deadline on quantities of sugar that can be held by bulk consumers, said sources.
“We (the government) will extend the deadline by six months,” the second source said.
Last August, the government said large sugar consumers would not be allowed to keep more than 15 days stockpile. The restriction will expire by end-February.