India may become regular importer of sugar

Source : Reuters:Thu, May 20, 2010 at 09:57



India may become a regular importer of sugar in the years ahead, but an Indian sugar industry official said Wednesday they have to do a better job of eliminating wild swings in production because they are the world's biggest consumer of the sweetener.

"The role of India in sugar is somewhat similar to the role of China in soybeans," Ben Pearcy, managing director of sugar and bioenergy in trade house Bunge Ltd, told participants at the annual International Sugar Organization/Datagro sugar conference.

A few years ago, China was not a major importer of soybeans but a series of developments changed that and Beijing is now a major importer of the grain.


earcy wondered if the same could happen to India when it comes to sugar.

He said there could be a catalyst or a "tipping point" that could impact Indian sugar

 production such as the availability of reliable water supplies in the Asian country.


India is the world's No 1 consumer of and the No 2 producer of sugar.



Two weak annual monsoons hit the cane crop of the country, forcing New Delhi to allow large sugar imports and sparking a rally that saw raw sugar prices to hit a 29-year top at 30.40 cents a lb on February 1.



The weather problems were blamed on an El Nino weather anomaly, which wreaks havoc on weather patterns in the Asia-Pacific region. That El Nino has peaked and is now fading and a La Nina is poised to take its place.

An improvement in sugar yields in India and a recovery in production helped drive down prices to a year low of 13 cents on May 7 in the ICE Futures US.



Indian sugar production is expected to recover in 2010/11 to around 23.5 million to 24 million tonnes, from 18.5 million tonnes last season.



MN Rao, deputy director general of the Indian Sugar Mills Association, told Reuters that India has to find some kind of solution to the "very wide fluctuation" in production.



"I don't think India will be a regular importer (of sugar). We can't afford to be an importer being the largest consumer. The swings (in production) need to be addressed," he said.