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. |