India is likely to import 2.8-3.0 million tonnes of raw sugar in the new season from October, lower than previous forecasts, the chief executive of Shree Renuka Sugars, India's top refiner and importer, said on Friday. "Currently global markets are estimating that India will have much larger imports than what I have mentioned.
Therefore, prices are going up. But I think actual buying will disappoint," Narendra Murkumbi told Reuters in an interview. India's sugarcane area has contracted after weak monsoon rains this year, sending raw sugar futures to a three-year peak on expectations that India's imports may jump to 4-5 million tonnes in 2009/10 from 2.5 million tonnes in the previous year.
Murkumbi said India would need additional 4 million tonnes in 2009/10, but a part of the requirement would be met by refining raw sugar imported this year. He said that out of 2.5 million tonnes of raw sugar imports India had contracted, 1.3 million tonnes would be refined in the year to September and the rest in the next season. "Next year we need close to 4 million tonnes. Therefore, we need to buy another 2.8-3.0 million tonnes," he said.
In February, India allowed mills to import raw sugar tax-free with a condition that an equal quantity of white sugar should be exported within three years. In April the government said mills importing raws until July 31 need not export whites. It also asked state-run firms to import up to 1 million tonnes of white sugar. India is likely to extend raw sugar imports beyond July.
Murkumbi said his firm, which refines imported raw sugar and also processes sugarcane, was likely to produce 1 million tonnes of sugar this year, and raise output next year by 70 percent. "In terms of refining we are talking of doubling our refining capacity to 1.2 million tonnes from 650,000 tonnes now. That includes facilities in the port city of Haldia and three mills in Karnataka," he said.
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