Four sugar mills in northern India have contracted imports of 100,000 tonnes of raws and a top producer in the region is negotiating a deal to buy 50,000 tonnes from Brazil, trade and industry sources said.
Duty-free imports of raws for refining and local sales, allowed last month, were initially expected to be attractive only for mills on the coast, not distant regions in the north which would have to pay additional freight.
"Of the 100,000 tonnes contracted, the four mills have received 50,000 tonnes and the rest is expected to arrive soon," a top official at a global trading firm told Reuters.
A top producer in the northern state of Uttar Pradesh, India's second-biggest sugar producing region, was negotiating to import 50,000 tonnes of raws and was planning to take delivery of some supplies soon while most would arrive later, the official said.
Last month, India allowed mills to import duty-free raws for domestic sales until September with a condition that the same quantity of whites should be exported within 24 months.
In an annual trade policy review, the government extended the time for such exports to 36 months.
"Our estimate is that about 800,000 tonnes have been contracted by mills across the country of which about 350,000 or 360,000 tonnes have arrived and the balance is yet to arrive," the official said.
Confirming the deals, a senior trade official said initial contracts were priced at a high $370-$390 per tonne, while the current price was around $315-$330 per tonne.
"Almost all the sugar is coming from Brazil. There may be an odd cargo from some Central American country, he said.
Farm Minister Sharad Pawar last week said the government's sugar output forecast had been cut to 16.5 million tonnes in the year to September from a previous estimate of 18 million tonnes due to a shortage of cane and lower yields.
Sugar output in India, the biggest producer after Brazil, was at 26.5 million tonnes in 2007/08, down from a record 28.4 million tonnes in the previous year.
Source : Reuters India