India extends sugar imports

NEW DELHI: Top global sugar consumer India on Wednesday extended duty-free import of sugar until

the end of next year as

it warned domestic

output could fall way

below demand.

The government prolonged duty-free import

of refined sugar to December 2010 from an original date of November 30 in 2009 to help control the price of the sweetener, whose production has been hit by bad weather.

“Total sugar production this season is likely to touch 16 million tonnes (in the current crop year that began in October). So, the situation is tight,” Food and Agriculture

Minister Sharad Pawar told reporters in New

Delhi. “But the requirement (for sugar) will be met,” Pawar said.

India needs about 23.5 million tonnes of sugar to meet its needs this year.

Global sugar prices recently surged to near 30-year highs amid a warning from the International Sugar Organisation that worldwide supplies are

expected to fall far short

of demand.

India’s government has said it will use a combination of imports and buffer stocks to tackle the domestic shortfall.

“(Duty-free) refined sugar imports have been extended till December 2010,” Pawar said. No change was announced in the March 31 duty-free period for the raw variety.

India may be forced

to import a record six million tonnes of sugar in 2009-10 to bridge the gap in supply, after importing around five million tonnes last year, analysts have forecast.

The government began permitting duty-free sugar imports in February.

India produced 26.4 million tonnes of sugar

in the 2007-08 season

but output slipped in the past year to an estimated 14 million to 15 million tonnes.

Retail sugar prices

have nearly doubled in India from a year ago to

Rs 33 (US 70 cents) a

kilogramme during this year’s religious festive

season in which sweets are hot-sellers.

India’s driest monsoon in nearly four decades

initially hit sugar output before flooding in key growing areas did further damage. Some farmers also have begun switching to better paying wheat

and rice.