RI among Asia's major sugar buyers

RI among Asia's major sugar buyers

BANGKOK (Reuters): Indonesia, Pakistan and China are likely to be Asia's major sugar importers in 2001 due to shortfalls in domestic production, traders in the region said on Friday.

Indonesia and Pakistan are in the market now, mainly for shipment in the first half of 2001, while China is expected to emerge as a buyer in the second half of the year.

Indonesia, southeast Asia's largest sugar importer, is expected to import between 1.2-1.5 million tons of sugar, mainly whites, because of domestic supply shortfalls.

"Indonesia still needs to import sugar due to production shortfalls in the country," said B.N. Shaikh, a leading Indonesian importer at PT. Al Khaleej Sugar based in Jakarta.

Pakistan is expected to import as much as 800,000 tons, both raws and whites, traders said.

India is likely to have the edge over Thailand in securing Pakistani orders due to its geographical advantage.

However, Pakistan's sugar industry has recently asked the government to raise the import duty on sugar and to ban sugar imports from India, trade sources say. Some millers have asked the government to look into whether India is dumping cheap supplies into Pakistan.

A ban would be a blow for India's efforts to trim its almost 10 million ton stockpile by exporting sugar, traders said.

An agriculture ministry official said Pakistan was monitoring domestic sugar prices but had taken no decision.

China was expected to buy up to one million tons of raws.

"People are still saying China will be buying sugar, and for shipment in the second half of the year," said one Singapore- based trader at a major trading firm.

Another trader said: "China will stop crushing in the next few months and its production is not estimated to be too good... That is another signal that they have to buy."

Japan and South Korea are not expected to increase the volume of their routine imports, traders said.

The countries each import around one million tons of the commodity annually. They are estimated to have already bought up to 70 percent of their local demand for shipments in the first half of the year.

Amid looming demand from Asia, sugar output in some major producing countries was estimated to be lower than previous years, traders said.

"Brazil's crop is tight, also the Australian as well as the Thai crop," said a trader at a major trading firm.

Brazilian sugar was facing difficulty penetrating the region this year compared with past years, due to tight supplies at home and higher freight rates because of stronger oil prices, traders said.

"I would say that South American origins are facing more difficulty than the past few years to find destinations in Asia due to relatively higher prices," said a trader.

Thailand's 2001 production is forecast at around 5.1 million tons in raw value, against 5.28 million tons in 2000.

Australia's 2001 production is estimated at around 4.5 million tons, higher than the previous disastrous 2000 crop of 4.15 million tons, but still lower than the country's average production levels.

In the region, Australian sugar usually arrives in the market in the second half of the year, while Thai sugar is abundant from the beginning of each year as the country normally starts crushing sugarcane around mid-November.

Australia and Thailand are the major suppliers of sugar in Asia.

Traders said that due to the attractive global price, Thai farmers were expected to grow more sugar in the next 2001/2002 crop year. The planting season would start soon after the crushing season finishes in mid-April.

"Sugarcane farmers are a very price-sensitive group. they always grow more crop whenever they think the price is good," said a Thai trader.