India buys raw sugar for first time since 2006

Aug 27 | Updated: Aug 28 2008, 05:54am hrs
Shree Renuka Sugars Ltd, countrys biggest refiner, bought 30,000 metric tonne of raw sugar from Brazil, the nations first overseas purchase in two and a half years as domestic production declines.

The sugar is scheduled for October arrival to Haldia, a port on Indias eastern coast and the site of the companys 2,000 tonne a day mill, which started production in June, MD, Narendra Murkumbi said in an interview. The commodity is being bought tax-free for turning into white sugar for export, he said.

Purchases by India, the worlds biggest sugar consumer, may bolster global prices, which have climbed 50% in the past year. Domestic output may total 22 million tonne in the year from October, down from 26.5 million tonsne this year, the Indian Sugar Mills Association said. The nation last bought sugar in 2005-06.

Domestic raw material is not available and buying from the spot market in Brazil is more attractive, Murkumbi said. We may import more raw sugar after December.

Sugar for October delivery rose 1.1% to 14.24 cents a pound on Wednesday on ICE Futures US, the former New York Board of Trade. The price is up 32% this year. Refined, or white, sugar for October delivery gained as much as 1.7% to $419.50 a tonne in London trading, the highest since November 2006. Shree Renuka signed a three-year contract with Brazil's Grupo Copersucar in 2006 to buy raw sugar.