Sugar purchases from Brazil to grow -Al Khaleej

The world's largest sugar refinery, Dubai-based Al Khaleej Sugar Co, expects its raw sugar purchases from Brazil to grow over the next few years as demand stays robust worldwide, its managing director said.

"We are slowly increasing (our purchases) as we can sell more," Jamal Al Ghurair told Reuters in an interview during the biannual sugar industry dinner that took place in Sao Paulo late Thursday.

The company currently buys around 2 million tonnes of Brazilian sugar per year, making it Brazil's biggest single customer for sugar. The country is the world's No. 1 producer and exporter of the commodity.

Ghurair said purchases through long-term contracts with Brazilian companies, which currently account for 70 percent of Al Khaleej's supply, are also expected to increase as they allow "guaranteed qualities, relationship and stable supply."

Al Khaleej has a long-term supply contract with Copersucar, Brazil's largest sugar and ethanol marketing company, and with other Brazilian sugar producers.

Annual volumes under Copersucar's agreement are expected to rise from the 1.3 million tonnes currently.

Ghurair also said sugar prices, which recently hit their highest level in nearly three decades, are supporting margins.

"I think this is a good price for everybody. We can sell at a higher price also," he said.

Al Khaleej sells refined sugar mainly to the Middle East, Asia and East Africa. Ghurair said the company has no plans to invest in production in Brazil.

"Not at the moment," he said.

source: forbes