June 1 (Bloomberg) India, the world’s largest sugar consumer, may import the commodity in 2009-2010 for a second year as output is forecast to lag behind demand, the Indian Sugar Mills Association said.
Production may be 20 million metric tons in the year starting Oct. 1, compared with consumption of about 21 million tons, S.L. Jain, director general of the association told reporters in Cairns, Australia today.
India this year began importing sugar for the first time since the 2005-2006 season as output declined for a second straight year. Prices have rallied 56 percent in the past 12 months as a drop in Indian production added to a forecast global supply deficit.
“As per current situation we are importing sugar, there may be some imports for next year also, but it may not be too large,” Jain said. If production rises to 20 million tons, there will be a marginal shortage that may be covered with imports, he said.
Raw-sugar futures for July delivery fell 0.4 percent, to 15.58 cents a pound on ICE Futures U.S. in New York when last traded on May 29. The commodity is the best performer in the past twelve months as measured by the Standard & Poor’s GSCI index of raw materials, ahead of gold and cocoa.
India is the world’s second-largest producer of sugar, behind Brazil.
The nation has already imported 1.5 million tons of sugar in 2008-2009, Jain said. Last week he forecast total imports of as much as 2.5 million tons.
“Prices are so high, there may be some tightening of belt,” Jain said. Indian consumption is “highly sensitive” to price, he said, after earlier speaking at the Kingsman Australian Sugar & Ethanol conference in Cairns.
Source : Bloomberg.com