Al Khaleej to buy more Indian sugar in first half

Dubai: Al Khaleej Sugar Co., the world's largest sugar refinery, will expand purchases of sugar from India in the first half of this year, according to Jamal Al Ghurair, managing director of the company.

The refinery has already bought 80,000 metric tonnes of the sweetener from India, the world's second-largest producer, and that number may climb to as much as 100,000 tonnes in the next two weeks, Al Ghurair said in an interview in Dubai before the opening of an annual conference organised by Kingsman SA, a Lausanne, Switzerland-based broker and researcher. Al Khaleej last tapped Indian supplies three to four years ago, he said.

"Normally we buy sugar from Brazil and we continue to buy sugar from Brazil, but from time to time, when India comes out with raw sugar, we buy it," Al Ghurair said in the interview. "We get a better deal and this is a product that is available in the market so we try to make use of it because of the proximity of the logistics between India and the UAE."

India is exporting sugar for a second year this season as domestic supplies exceed demand. Production there will rise 6.2 per cent to 28.3 million tonnes in the season ending September 30, data from the US Department of Agriculture show.

A panel of ministers may consider permits for shipment of another 1 million tonnes on February 7 after clearing a similar quantity in November, according to an official with direct knowledge of the talks, who declined to be identified because the plan hasn't been announced.

Buying Indian sugar is about $20 a ton cheaper than purchasing it from Brazil, according to Al Ghurair.

The Indian sugar, which is different from the traditional raw sugar, will be used to make the white, or refined, variety, he said.

The refinery has no plans to purchase sugar from Thailand, the world's second-largest exporter.