India's sugar mills favour duty-free raws imports

NEW DELHI, Sept 29 (Reuters) - Indian mills should be allowed to import raw sugar duty-free against a commitment to export the refined commodity as domestic output is expected to fall sharply, a leading industry body said on Monday.

India, the world's biggest producer of the sweetener after Brazil, allowed mills to import raw sugar free of duty in 2005 on the condition that the same amount of refined sugar would be exported within 36 months.

"It is important that the scheme introduced in 2004/05 to improve capacity utilisation of the industry be put in place once again," Jayantilal Patel, president of the National Federation of Cooperative Sugar Factories, said at the annual general meeting of the industry body.

Analysts say imports of raws by India would cheer major producers such as Brazil, Thailand and Australia and push up benchmark prices in New York and London. On Friday, the New York March raw sugar contract SBH9 eased 0.07 cent to finish at 14.48 cents per lb, while London's December white sugar contract LSUZ8 climbed $3.20 to end at $402.50 a tonne.

Patel said India's sugar output, estimated to be about 20 million tonnes in the year from October, would fall short of likely domestic consumption of 22.5 million tonnes.