A trading body formed by private sugar mills, Indian Sugar Exim Corp, is in talks to sell 250,000 tonnes of raw sugar, and plans to ship the bulk to Middle Eastern refineries, a trade source said on Wednesday.
The sugar will come from next season's cane crop and the corporation is eyeing prices of $250-$270 a tonne, the official, who could not be named, told Reuters. "The talks are in an early stage," he said. "Other details will be worked out in the next couple of days and deliveries will take place only next year."
"It makes sense to ship raw sugar from mills near ports in southern parts of the country to cut freight costs," the official said. India last month agreed to sell 250,000 tonnes of raw sugar to Dubai's al-Khaleej refinery, the Middle East's biggest refined sugar producer, in its first ever overseas sales.
The same body this week floated a tender seeking to export more raw sugar but decided not to sell as prices offered by international firms were considered low, trade officials said.
Shanti Lal Jain, director general of the Indian Sugar Mills Association, has said India is looking to step up exports of raw sugar to neighbouring countries. That would put pressure on Brazil and Thailand, which dominate the world market. India is likely to produce a record 28.5 million tonnes of sugar in the year to September 2007, up from 19.3 million tonnes last season, according to industry estimates.