New Delhi: Indian buyers have stopped contracting new sugar import deals as local prices are lower than the landed cost of imports, a top industry official said on Wednesday.
Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories, told reporters that no new deal had been signed in the past 45 days.
Mills in India, the world’s top sugar consumer, began crushing cane early last month, boosting supplies and helping spot prices fall 10 percent after hitting a record Rs3,443.50 ($73.7) per 100 kg on 6 November.
“There is no import deal in the last month and a half. Import deals are not happening due to higher global prices, lower Indian prices and shortage of railway wagons is also delaying imports,” Kumar said.
New York’s March raw sugar contract declined 0.46 cents on Tuesday as the market took a breather from a rally, but analysts said the outlook for the sweetener remained bullish because of tight supplies and strong demand.
Sugar futures have rallied to the highest in nearly three decades propped up by large imports by India and expectations that the country would remain a big buyer next year, particularly after the end of cane crushing season by March.
India imported 5 million tonnes of sugar, mostly raws, in 2008/09 as many farmers gave up cane cultivation, while this year’s failed monsoon also hit cane output raising prospects of large imports.
Kumar said the shortage of railway wagons to transport imported sugar had clogged ports including Kandla in western India, where large quantities of imported sugar had landed.
“All godowns are full at Kandla. There is no space there,” he said.