India May Export 1 Million Tons of Sugar as Supplies Increase.

India, the largest sugar user, may have enough supplies to ship at least 1 million metric tons as the nation enters the export market for the first time in two years, according to the country’s biggest refiner.

“We will be self-sufficient and the availability will be enough for exports” in the year starting Oct. 1, said Narendra Murkumbi, managing director of Shree Renuka Sugars Ltd., in an interview in New Delhi today.

Shipments from the world’s second-biggest producer may help slake demand in Asia that exceeds supply by 30 percent, according to Wilmar International Ltd., which this week agreed to acquire Australia’s biggest sugar refiner. Production in Thailand, the second-largest exporter, is forecast by the government to drop 13 percent in the next crop year and the Philippines today said it will buy 150,000 tons.

“Physical demand for white sugar is quite strong all over the world,” Murkumbi said. “The Asian market is very tight as there is a lot of pent-up demand. Thailand, which is traditional exporter, is buying sugar.”

India may produce 25 million tons in the year starting Oct. 1, from 18.7 million tons estimated this season, according to the Indian Sugar Mills Association. That’s more than 23 million tons forecast in June by a government official.

White, or refined, sugar for October delivery advanced 1.4 percent to $530.20 a ton at 12:26 p.m. on the Liffe exchange in London. A close at that price would equate to a weekly gain of 7.8 percent, the most since the week ended June 11.

11-Week High

Raw sugar has gained 22 percent since mid-May and touched an 11-week high of 17.3 cents a pound yesterday. Eight of 12 traders, analysts and brokers surveyed by Bloomberg forecast that futures will gain next week amid tight global supplies.

“Brazil has received less rainfall and that is boosting sugar,” Murkumbi said. Prices will average between 16 to 20 cents this quarter, he forecast.

Output in Brazil, the largest producer, may be reduced to 31.84 million tons from 33.45 million tons due to low rainfall and high temperatures, according to Erick Mello de Figueiredo, a trader at Terra Futuros, the nation’s largest commodities broker.

Farmers in India planted cane in 4.72 million hectares as of July 2, up 13 percent from the same date a year ago, the farm ministry said July 2. Stockpiles will jump 53 percent in the year ending Sept. 30, according to ISMA. Mills will end the season with 4.9 million tons, compared with 3.2 million tons a year earlier, the group said on June 14.

The country last exported sugar in the 2008-2009 season and has since been a net buyer of the commodity.

Source : Business Week