DUBAI: Physical white sugar off take is expected to pick up as pent-up demand returns to the market, a senior Indian refinery executive said on Sunday.
Subdued physical demand for sugar because of high prices has reduced the premium of white (refined) sugar prices over raw sugar prices, a measure of refining profitability.
"The white premium is at or near the bottom," Somit Banerjee, senior vice-president (trade desk) of Shree Renuka Sugars, India's biggest refinery, told the Kingsman sugar conference in Dubai.
"White sugar demand should re-emerge as importers re-stock."
Dubai's Al Khaleej sugar refinery, one of the largest in the world, has been shut since Feb. 1 and is likely to reopen around Feb. 25, its managing director Jamal Al Ghurair said on Saturday.
The refinery, which last year had a production capacity of about 1.5 million tonnes, had been shut mainly because of a low premium of white sugar prices over raw sugar prices, he said.
The premium of the London (Liffe) May white sugar contract over the New York (ICE) May raw sugar contract stands at around $90 per tonne, below comfortable refining margins which would be in excess of $100 per tonne.
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