Despite glut, India not to sell sugar cheap

Despite glut, India not to sell sugar cheap

India’s top sugar industry executive said on Thursday exporters would not sell at rock-bottom prices and that levels near 10 cents per pound (0.45kg) seemed viable.

In an interview with Reuters at the close of the Asia International Sugar Conference, S.L. Jain, head of the Indian Sugar Mills Association and the Indian Sugar Exim Corp., said he had not been exporting at prices below about 10 cents a pound.

“We are not a seller at any price," he said. “We will not be selling sugar at a price which is not viable for us." Jain declined to reveal his exact selling price but said it was around 10 cents.

World raw sugar prices have fallen by almost one-fifth so far this year, dragged down by a huge oversupply driven by leading producers Brazil and India.

The IntercontinentalExchange’s NYBOT electronic screen for sugar showed the October contract up 0.07 cent at 9.49 cents a pound on Thursday.

The Indian government lifted a ban on sugar exports in January, and by 30 September total Indian exports for the present year were around 1.5 million tonnes (mt), possibly 2mt, industry sources say.

Battling a growing sugar surplus produced by strongly rising production, Indian exports for 2007-08 have been forecast at 3mt by the government and at 4-5mt by analysts and ­traders.

Jain said exports in 2007-08 could be as much as 4mt, but said India would not sell at any price and was investigating domestic measures to manage the surplus without undertaking huge exports.

“Yes, I would be very happy to do four million," he said. “But if the price is there." It was in India’s interest as much as anybody else’s to see sugar prices at healthy levels, he said.

Jain contrasted this policy on sugar exports with sales by other major exporting countries such as Thailand and Australia, which he said would sell at lower prices.

In recent months, Jain confirmed, India had sold 465,000 tonnes of raw sugar to Dubai’s al Khaleej refinery and 100,000 tonnes to international commodities trading giant Cargill.

Jain said next year’s crop would not be less than 30mt, up from 28.5mt in the present year. But it was very difficult to predict. The crop could exceed 30mt and could reach the International Sugar Organization’s forecast of more than 33mt, he said. REUTERS