An Indian firm has bought 40,000 tonnes of raw sugar at $255 per tonne cost and freight for delivery in March, a company official said on Friday. "The sugar was purchased last week from Brazil for a mill based in western India," the official told Reuters on the sidelines of an industry meeting on sugar. He did not give details. Indian firms have been importing raw sugar this year to bridge a domestic supply shortfall after a poor sugarcane crop.
India had a dismal sugar harvest in 2003/04 and is expecting another poor sugar crop in 2004/05 because of a drought in some key cane-growing states.
The official said raw sugar buyers were showing interest in buying at these price levels. Indian mills bought raw sugar in January at $240 a tonne and at levels lower than that earlier.
Traders said mills stopped purchases when raw sugar prices rose early this month to around $265 a tonne, cost and freight, and were looking at price levels of $250 to enter the market.
"Those who contracted for raw sugar earlier got good deals but now millers have to accept to buy at the current prevailing prices," said the official.
"Some dealers think that a price level of $222 per tonne is going to come back, but that is unlikely."
Traders and analysts said India had contracted for 1.4 million tonnes of raw sugar in the new season that began in October and would be looking for another one million tonnes in the rest of the season.
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