Indian Mills Sign Raw Sugar Import Deals

NEW DELHI -- Mills in northern India have struck deals in the past 10 days to import 80,000-100,000 metric tons of raw sugar, industry officials said Wednesday.

The raw sugar is being imported mostly from Brazil at $300-$330/ton, free on board. The shipments are expected to arrive in the June-July period.

Indian mills are importing sugar to optimize their unutilized refining capacity, following a shortfall in the country's cane output in the marketing year ended Sept. 30, 2008.

Domestic sugar output is estimated to fall to 14.5 million tons in the year ending September 2009, down from 26.3 million tons a year ago.

The grade of sugar being imported ranges from 800-1,000 Icumsa (the international unit to express sugar purity).

The officials said the imports are being made by Simbhaoli Sugars Ltd., Triveni Engineering & Industries Ltd and another mill, which they didn't name.

Since the start of the marketing year, Indian mills have imported about 1.3 million tons of raw sugar, according to the Indian Sugar Mills Association.

The consumption of sugar in India usually increases in the peak summer season in April-May, mainly due to greater sales of beverages and ice creams.

The country's annual sugar consumption is about 22.5 million tons.

"The landed price of imported sugar is still about 2 rupees ($0.04) a kilogram more than domestic prices, but price parity is likely to be reached in 2 to 3 months," an industry official said, declining to be named.

India's federal government had relaxed raw sugar import norms in February to meet the domestic shortage, and was actively considering duty-free white sugar imports.

Trade Secretary G.K. Pillai said the issue was before the cabinet, but a decision isn't expected soon as elections are around the corner.

The officials also said up to 4 million tons of raw sugar may be imported by September 2009 to maintain sufficient supply even in the new marketing year that begins Oct. 1.

Earlier, the government had estimated raw sugar imports would total only around 1.5 million tons.

Sugar output for the marketing year beginning Oct. 1, 2009 is expected to reach 19 million tons, compared with a previous estimate of 20 million tons, the officials said.