Asian sugar buyers may hold back on new purchases

After building up stocks, Asian sugar buyers may hold back on new purchases in the coming weeks as they await lower prices on world markets. India and Pakistan are not in a hurry to buy, while the Chinese are waiting for prices to ease in May and June when the Brazilian crop will be harvested. Indonesian buyers have almost exhausted their import quotas for white sugar and will now be looking forward to permits for raw sugar imports, they said.
"India will again be in the market, but not now," said a New Delhi-based trader.
"The country has bought enough raw sugar and there is no rush for fresh bookings." India, which is facing a sharp drop in output, has contracted to import about 1.8 million tonnes of raw sugar since October 2004 and is seen buying another 500,000 tonnes to 800,000 tonnes by September, traders said.
India's sugar output, excluding processing of imported raw sugar, is seen falling to 12.5 million tonnes in the current year to September from 13.8 million last year and 20 million tonnes in the previous year.
But the output is seen bouncing back to 17 to 18 million tonnes in the next year, traders said.
The last Indian deal was finalised a week ago at $257 a tonne, including cost and freight, for 80,000 tonnes of Brazilian raw sugar and no other contract was reported after that, Indian traders said.
Raw sugar is quoted at about $265 a tonne, including cost and freight, at ports in India, the world's largest sugar consumer.
Pakistan, which has had a sharp drop in domestic sugar production, has been active in the market since January and will be looking for just 10,000 to 20,000 tonnes of raw sugar in the coming months, traders in Pakistan said.
"Considering the import orders already placed, there are no needs for further imports," said a Karachi-based trader. "The government should now make sure that purchases are not in excess of needs."
Pakistani importers have booked orders for about 500,000 tonnes of sugar since January, when the government allowed duty-free imports to cover supply shortages.
Pakistan scrapped a 25-percent import duty on sugar in January to cover an expected shortfall in production and check a surge in domestic prices. Private importers had booked around 347,000 tonnes of raw sugar and 147,000 tonnes of refined sugar by the second week of March.
Domestic sugar production is expected to slip to about 3.2 million tonnes this year from 4.0 million in the previous year. Annual sugar consumption is around 3.6 million tonnes. Indonesian importers have almost finished buying white sugar for the current year and are awaiting permits for raw sugar imports, traders in Jakarta said.