India, the world's biggest sugar consumer, is expected to raise sugar imports later this year and in 2005 to compensate for declining stocks after a poor harvest, a United Nations sugar expert said on Tuesday.
"Stocks have fallen quite significantly, and Indian demand should manifest itself towards the end of this year and early next year," Kaison Chang, senior sugar specialist of the UN Food and Agriculture Organisation (FAO), told Reuters.
He also said he expected physical raw sugar prices to remain firm into 2005, amid increased demand by India, China and other Asian countries, as well as an expected global downturn in output and falling sugar stocks.
Refined sugar prices have risen by almost a third on London's Liffe futures market this year. Liffe front-month December white sugar futures were down $0.3 to $240.0 a tonne on Tuesday afternoon.
Global sugar consumption in 2004 is forecast by Rome-based FAO to exceed global sugar output for the second time in eight years, largely due to smaller harvests in India and China.
World sugar consumption is forecast to reach 143 million tonnes in 2004, exceeding production by two million tonnes.
Sugar production in India is forecast at 13.8 million tonnes, 51 percent lower than 2002/03, according to FAO.
Cane production in India was severely cut by drought in cane growing regions in Maharashtra, Karnata and Gujarat, it said.
Chang said top grower Brazil's capacity to produce and export sugar was likely to absorb increased Indian demand.