Al Khaleej may import 1.5 mt

Al Khaleej Sugar Co., the world's biggest sugar refiner, may increase production by as much as 43 per cent this year, using only raw sugar from India.

The Dubai-based company may produce as much as 2 million metric tonnes, most of which will be exported to West Asia and Far East, Managing Director Jamal Al-Ghurair said on Monday. Al Khaleej is likely to import as much as 1.5 million tonnes from India, Al-Ghurair said.

"We can break 2 million tonnes production if we start at the beginning of the year," Al-Ghurair said in an interview at a sugar-trade conference in Dubai.

Al Khaleej will be importing no sugar from Brazil, the world's biggest producer, this year, according to Al-Ghurair. It is the first year the company is importing Indian raw sugar.

"There's no advantage to bringing anything in from Brazil," Al-Ghurair said. "For this year, it will all be from India. They've got more of an advantage because of freight prices and logistics."

Sugar, among the worst-performing commodities in 2007, may fall this year because prices are trading at a discount to Brazil's cost of production, Al-Ghurair said, without specifying by how much the price could drop.

Raw sugar price "should come down to make the discount disappear," he said. "The spread between white and raw sugar is at reasonable levels."

Raw sugar futures for March stood unchanged at 12.35 cents a pound on ICE Futures US as of 6.34 am London time. Prices declined 7.9 per cent last year.

White sugar for March delivery closed 1.7 per cent lower at $344.30 a tonne on February 1 on the Liffe exchange in London. The premium for white sugar over raw stood at $72 a metric tonne, down from last year's high of $145 a metric tonne on May 17.