The Hindu Business Line : Raw sugar imports likely to be lower

THE country's raw sugar imports are likely to be only 20 lakh tonnes (lt) during the current 2004-'05 season (October-September), as against the earlier estimated requirement of 25-30 lt.

This comes in view of the domestic sugar output turning out to be 10 lt higher than what was anticipated earlier. The original production estimate for 2004-'05 was as low as 115-117 lt, which is now being revised to 125-127 lt.

Maharashtra's production, which was earlier expected at only 17 lt, is now expected to be 22 lt. The reason: a good spell of winter rains, dueto which average sugarcane yields are slated to go up from 68 tonnes a hectare to 70.5 tonnes a hectare.

Moreover, average sugar recovery in the State is now being placed at 11.51 per cent, up from the earlier 10.68-per cent figure.

A similar upward revision in sugar output is anticipated in Uttar Pradesh (from 40 lt to 44 lt), and Gujarat, with mills producing an extra two lt.

All these estimates are net of production from processing of raw sugar imports.

"On the whole, the country's output would be roughly 10 lt more than the original estimate. Taking production at 125 lt, imports at 20 lt and opening stocks of 85 lt, the total domestic availability for 2004-'05 comes to 230 lt. Assuming consumption of 185-190 lt, the season would close with stocks of 40-45 lt, corresponding to more than 2.5 months requirement," sources pointed out.

In other words, even with 20-lt raw sugar imports, the domestic availability situation would be comfortable. A total quantity of 13.21 lt of raw sugar has been imported during the current season till March (after accounting for the likely deliveries taking place this month). "We don't see overall imports crossing 20 lt. In any case, given the present international prices, imports are not as attractive as they were till recently," the sources added.

The benchmark No. 11 raw sugar futures at the New York Board of Trade for May 2005 closed on Tuesday at 9.13 cents a pound or $201 a tonne free-on-board, which translates into a landed price of almost $260 a tonne here. July futures quotes are ruling even higher at 9.32 cents a pound.

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