India Won’t Import Sugar; China’s Purchases to Slump (Update1)
April 11 (Bloomberg) — India won’t import sugar for the first year in
six and China’s purchases may slump 21 percent, U.S. government reports
said. Increased production from the two countries, which account for a
fifth of global supply, may end a two-year rally that pushed prices to a
In India, the world’s biggest sugar consumer, imports will fall to zero
in the year starting Oct. 1 as domestic production rises to a record,
the Foreign Agricultural Service in New Delhi said in a report
yesterday. A forecast 16 percent jump in Chinese output will cause its
sugar imports to slide to a four- year low, the service said in a
“More sugar coming onto the market will lower prices,” Tobin Gorey, a
commodity analyst with the Commonwealth Bank of Australia in Sydney,
said in an interview. Raw sugar may trade between 14 and 19 cents a
pound in the next 12 months, he said.
Sugar’s rally to its highest in at least 25 years in February is
spurring increased production from farmers in India, China and Thailand,
broker C. Czarnikow Sugar Ltd. said last week. Additional supplies may
spur hedge funds and other speculators to reduce their bets that prices
Speculative buying of the commodity and expectations that Brazil, the
world’s biggest grower, will use more sugarcane to make ethanol as an
alternative to gasoline helped cause prices in New York to double in the
Higher prices for crude oil, which rose above $69 a barrel in London
today for the first time on concern over supplies from Iran, will limit
declines in the sugar price, Gorey said.
Raw sugar for delivery in May fell 0.6 percent to 17.01 cents a pound
when last traded yesterday on the New York Board of Trade. The futures
reached 19.3 cents a pound on Feb. 3, the highest closing price since
The Foreign Agricultural Service in New Delhi slashed its forecast for
India’s raw sugar imports in the current year to 50,000 metric tons,
from an earlier prediction of 1 million tons on larger-than-expected
India, which began importing sugar in 2001-02 to plug a local production
shortfall, may produce 22.3 million tons of the sweetener in 2006-07,
almost 10 percent more than the 20.3 million tons estimated for the
“Due to higher domestic production and firm international sugar prices,
India is set to emerge as a net sugar exporter in 2005-06,” Santosh
Singh said in the report. He forecasts exports to reach 1.5 million tons
in the coming year from 600,000 tons in 2005-06.
In China, the world’s second-largest sugar consumer, imports may slide
to 1.1 million tons in the year starting on Oct. 1 from 1.4 million tons
in 2005-06, James Butterworth and Jiang Junyang said in a report yesterday.
The country’s sugar output is expected to reach 11.1 million tons in
2006-07 from 9.6 million tons in the current year.
Growing demand for sugar in Russia, the world’s largest importer of the
sweetener, may cause stockpiles there to dwindle to 400,000 tons by
Sept. 30, 2007, the lowest since at least 1988, according to the U.S.
Foreign Agricultural Service.
Growth in Russia’s food-processing industry is expected to help drive a
1.6 percent increase in domestic sugar consumption, forecast to reach
6.81 million tons in the year starting Oct. 1, 2006, Mikhail Maksimenko
said yesterday in a report, which was prepared in the U.S. embassy in
He predicts production will be little changed at 2.55 million tons in
2006-07, while imports may increase 2.4 percent to 4.3 million tons.
Brazil and Cuba are the biggest suppliers of sugar to Russia.
Sugar output in the Philippines is expected to climb 8.9 percent to 2.2
million tons in the year starting Sept. 1, 2006, the Foreign
Agricultural Service in Manila said yesterday. A 2.6 percent increase in
domestic consumption of the commodity will reduce the country’s exports
in 2006-07 to 156,000 tons from an estimated 224,000 tons in the current
year, the report said.
To contact the reporter on this story:
Jason Gale in Melbourne at email@example.com
Last Updated: April 11, 2006 02:23 EDT