The Hindu Business Line : Sugar prices likely to stay firm in line with global trend

THE domestic sugar market will continue to rule firm in the near-term following the rising trend in prices internationally, Mr Chandra Sekhar Nopany, President, Indian Sugar Mills Association, has said.

Sugar prices increased by about 5 per cent in the last 3 months, he said.

Speaking on "Changing dimensions of India sugar economy" at the Sugar Summit 2006 in Mumbai on Friday, Mr Nopany said: "With the imminent withdrawal of a large quantity of white sugar from the world market, prices have increased substantially internationally. Raw sugar prices have jumped by over 100 per cent within a short span of a few months. In the white sugar market, such sharp price rise has not been seen yet even though the prices are much higher now than what they were before."

Opportunity: "This provides an excellent opportunity to the Indian producers to increase sugar exports, especially as India has a strategic advantage of being surrounded by large importing countries, including Pakistan, which is in dire need of sugar this year.

The Indian sugar industry is well placed to take full advantage of this opportunity and emerge as a major global supplier."

The Government has allowed exports only against the export obligation corresponding to the raw sugar imported during the last two years. "This quantity is quite sizeable at about 2 million tonnes," he said.

"From being a net importer of sugar, we are now on the threshold of being a major exporter of sugar. Till recently, India has been the largest producer of sugarcane and sugar in the world although Brazil has now overtaken India, mainly due to the accelerated promotion of ethanol as a mixed fuel," he said.

Hopes: The expectation was that the EU would stop dumping of sugar in the world market by the middle of the current year or latest by the third quarter of the year, after a WTO ruling on fair trade opportunities, he said.

On overview of global sugar market, Mr Adam Leetham, Director, C. Czarnikow Sugar (India) Pvt Ltd, said world sugar trade was estimated at 40 mt, which include 17 mt of white sugar trade. Brazil, EU and Australia were the major players.