Sugar Exports From India to Climb on Higher Output, Group Says.

Sugar exports from India, the second-largest producer, may climb as much as 54 percent next year as output expands for a third year and a supply shortage from Brazil drives demand, according to a producers’ group.

Shipments may rise to between 3 million metric tons and 4 million tons in the year starting Oct. 1, Narendra Murkumbi, president of the Indian Sugar Mills Association, said in an e- mailed response to questions from Bloomberg News. India has allowed mills to ship 2.6 million tons of sugar this year.

Rising Indian supplies may help cool a 45 percent rally in raw sugar prices in New York and cap global food costs tracked by the United Nations that advanced in June for the 10th time in the past 12 months. Futures have jumped on concern that cane production in Brazil will drop for the first time in six years because of adverse weather.

“Indian sugar is finding buyers in the Middle East, North and East Africa,” said Murkumbi, who is also the managing director of Shree Renuka Sugars Ltd. (SHRS) “Economic growth, change in diet and supply shortage from other origins” are driving demand for Indian sugar, he said.

Sugar may advance to 29 cents a pound by December as China, the second-biggest user, and Indonesia replenish stockpiles and the crop declines in Brazil, according to the median in a Bloomberg News survey of eight exporters, importers and traders at a conference in Cebu, the Philippines this week.

The harvest in Brazil’s Center-South, the world’s largest producing region, will fall short of previous estimates on lower-than-expected yields, the Unica industry association said on Aug. 11. Output will be 31.6 million tons, down from a July 13 estimate of 32.4 million tons, it said.
Yemen, Iraq

Refined sugar exports from India were fetching between $730 a ton between $740 a ton on a free-on-board basis and buyers included Sri Lanka, Bangladesh, Yemen and Iraq, Murkumbi said. The nation may ship 200,000 tons to 300,000 tons by Sept. 30, he said.

India’s sugar production may increase by as much as 7 percent to 26 million tons next year, Murkumbi said. Prices may remain ‘stable-to-firm’ in the near term, he said.

White sugar for October delivery was down 0.4 percent at $745.50 a ton in London at 2:35 p.m. in Mumbai. Raw sugar for October delivery climbed as much as 1.1 percent to 28.34 cents a pound in New York.

Source : bloomberg.com