London: The Sugar Export Corporation ISEC, which recently sold raws from India’s next crop to the Dubai al-Khaleej refinery, will not sell raw sugar at current prices, its chief executive S.L. Jain said on Thursday.
“At today’s levels prices are too low,” Jain, head of the Indian Sugar Exim Corporation Ltd (ISEC), told Reuters during a trip to London to attend an industry function.
“We will not dump sugar,” he added.
“Less than 10 cents per lb does not suit us.”
New York Board of Trade (NYBOT) March 2008 raw sugar futures stood at 9.26 cents per lb, down by 0.11 cent, in late afternoon trading.
Jain said he expected Indian raw sugar export sales from the next crop not to exceed 500,000 tonnes, but the total export tonnage would depend on prices.
Referring to the recent slide in sugar futures following news of the Indian raw sugar sale to Dubai, Jain said of the sugar market: “The psychology is really bad.”
A huge centre-south Brazilian harvest and the prospect of substantial Indian raw sugar exports from the next crop are weighing heavily on raw sugar prices, which have fallen by almost 30% this year.
Sugar merchant ED&F Man said on 14 June said it was bearish on sugar prices due to the weight of Brazilian and Indian supplies.
Dubai’s al-Khaleej refinery last week confirmed it had bought more than 200,000 tonnes of Indian raw sugar for shipment later this year and into next year, its first purchase of Indian raw sugar, muscling out competition from Brazil.
Jain said the raw sugar sold to Dubai, for shipment between December 2007 and March 2008, totalled 235,000 tonnes.
He said the sale was agreed at $246.50 per tonne FOB India, and estimated India’s net freight advantage over Brazil to the Dubai refinery at $35 per tonne.
He added that Indian production costs were higher than Brazil’s, but said India’s freight advantage boosted Indian sales prospects in nearby markets from south Asia to the Middle East.
Jain estimated Indian 2006/07 sugar output at 27.5 million tonnes, and forecast 2007/08 production at 28-29 million.