Hyderabad, March 15 The International Sugar Organisation (ISO) feels that the lower domestic prices have slowed import deals since mid February. Quoting trade sources, it said this was because the domestic prices fell below import parity levels.
The organisation said that the global sugar market was keenly looking at the developments in India on the sugar front, with the world's largest sugar importer witnessing a cooling-off period in February.
The domestic prices in India have fallen sharply from the record highs of over $880 a tonnes in January. “In February, the sugar spot price ex-Kolhapur had scaled back 20 per cent to reach $700 a tonne,” ISO said in its latest sugar report.]
Government policies
The February report, however, attributed the price fall to Government policies and not to higher production. “The Government has asked sugar millers to sell non-levy sugar quota for February on a weekly basis. It has also prevented large sugar buyers from stocking sugar equivalent to more than 10 days of consumption,” it said.
The report also found a downward trend in the world sugar quotations in the last half of February as a result of a downward technical correction and reduced demand in the physical markets. Government policy interventions in response to the record high prices too contributed to this.
In August, 2009, the organisation pegged the gap between the domestic production and consumption in India at 5.7 mt. It estimated that the production could decline by 15 per cent in sugar output as against the last year. In 2008-09, the output dipped by 44.5 per cent when compared to the 2007-08 figure.
Quoting Government sources, the February report said that the country had imported 1.17 million tonnes of raw sugar and 4.50 lakh tonnes of white sugar between October 2009 and mid-February. While estimating the domestic supplies at 18.5 mt in 2009-10 as against the demand of 23 mt, leaving scope for significant volume of imports.
Source : Business Line