India may become regular importer of sugar

* Swings in Indian sugar output must be remedied

* El Nino weather pattern has hurt Indian sugar crop

By Marcy Nicholson and Rene Pastor

NEW YORK, May 19 (BestGrowthStock) – India may become a regular
importer of sugar in the years ahead, but an Indian sugar
industry official said Wednesday they have to do a better job
of eliminating wild swings in production because they are the
world’s biggest consumer of the sweetener.

“The role of India in sugar is somewhat similar to the role
of China in soybeans,” Ben Pearcy, managing director of sugar
and bioenergy in trade house Bunge Ltd (BG.N: ), told
participants at the annual International Sugar
Organization/Datagro sugar conference.

A few years ago, China was not a major importer of soybeans
but a series of developments changed that and Beijing is now a
major importer of the grain.

Pearcy wondered if the same could happen to India when it
comes to sugar.

He said there could be a catalyst or a “tipping point” that
could impact Indian sugar production such as the availability
of reliable water supplies in the Asian country.

India is the world’s No. 1 consumer of and the No. 2
producer of sugar.

Two weak annual monsoons hit the cane crop of the country,
forcing New Delhi to allow large sugar imports and sparking a
rally that saw raw sugar prices (0#SB:: ) to hit a 29-year top at
30.40 cents a lb on Feb. 1.

The weather problems were blamed on an El Nino weather
anomaly, which wreaks havoc on weather patterns in the
Asia-Pacific region. That El Nino has peaked and is now fading
and a La Nina is poised to take its place.

An improvement in sugar yields in India and a recovery in
production helped drive down prices to a year low of 13 cents
on May 7 in the ICE Futures U.S.

Indian sugar production is expected to recover in 2010/11
to around 23.5 million to 24 million tonnes, from 18.5 million
tonnes last season.

M.N. Rao, deputy director general of the Indian Sugar Mills
Association, told Reuters that India has to find some kind of
solution to the “very wide fluctuation” in production.

“I don’t think India will be a regular importer (of sugar).
We can’t afford to be an importer being the largest consumer.
The swings (in production) need to be addressed,” he said.

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(Editing by Lisa Shumaker)

India may become regular importer of sugar