By Pratik Parija
Feb. 10 (Bloomberg) -- Farmers in India, the biggest sugar consumer, may only increase planting of cane “marginally” as some growers choose grains, Farm Secretary T. Nanda Kumar said.
“It’s increasing but not significantly because everybody won’t like to go back to sugar cane,” Nanda Kumar said in an interview yesterday in New Delhi. “There’s also the wheat and rice combination that many farmers are happy with.”
A less-than-expected increase in cane area may force the nation to import for a third year, supporting prices that rose to the highest in three decades in New York this month. Output may rebound to as much as 23 million to 24 million metric tons in the year starting Oct. 1, the Indian Sugar Mills Association said this week. The country may still have a “small deficit,” Rahil Shaikh, India head for ED&F Man said in Dubai Feb. 8.
Sugar had its biggest annual advance since 1974 last year as heavy rains and drought pared harvests in Brazil and India, the largest growers, and forced buyers from Egypt to Mexico to seek supplies from overseas. Futures reached 30.4 cents on Feb. 1, the highest since January 1981.
Indian millers have contracted to import 4.5 million tons, including 400,000 tons of white sugar, since the start of the 2009-2010 season on Oct. 1, according to the association. Last year, imports were 2.5 million tons. Purchases may be 3 million tons next year, broker Kingsman SA said at the same conference.
Raw-sugar futures for March delivery gained 1.8 percent to 27.07 cents a pound on ICE Futures U.S. in New York yesterday, the biggest gain for a most-active contract since Jan. 29.
To contact the reporter on this story: Thomas Kutty Abraham in Dubai at tabraham4@bloomberg.net
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