New Delhi, Aug 8 - India, a large exporter of sugar this year, will turn a big importer of the sweetner after October 2009 as the crop shrinks and demand in the world's top consumer rises, a leading producer said on Friday.
The country may import up to 4 million tonnes in the crop year from October 2009, Sanjay Taparia, finance director at Simbhaoli Sugars Ltd, told Reuters in an interview.
He said India's imports would have been even higher but the country's choked ports would not be able to handle such a surge.
Sugar output in India, the world's second largest producer after Brazil, is likely to be 26.5 million tonnes this year, down from a record 28.4 million tonnes last year. Exports in the current year are likely to be a record 4 million tonnes.
Some expect production to fall further to 18-19 million tonnes in 2009/10 as deficient rainfall this summer has affected planting in some parts of the country.
Taparia said demand in the year that begins in October 2008 would be met from the new crop and stocks of 11 million tonnes.
"But in 2009/10, we will have to import for sure," Taparia said, adding that India would become a larger importer in years ahead as farmers turn to less risky and more lucrative crops.
Domestic demand is steadily growing by 1-1.5 million tonnes annually in India, the world's leading consumer of sugar, and could touch 24 million tonnes in 2009/10.
Traders say sugar prices have risen to 16.50 rupees (40 cents) per kilogram on forecasts of lower output in the next two years. The previous year's all-time high production had hammered down prices to 14.50 rupees per kg.
Taparia said domestic prices would hover around 17 rupees and prices would not come down even with imports as the world market was tight and international prices remained high.
"World market prices always go up the moment they sense India is buying because India never buys small quantities," he said.
Taparia added he expected the government to scrap import duties on sugar, currently at 60 percent, to facilitate imports.
"I believe the government will remain tolerant up to 20 rupees a kilogram, and beyond that they will be doing something." Simbhaoli has about 100,000 tonnes of sugar stocks from the sugar year 2006/07, Taparia said. It plans to crush about 2 million tonnes of cane in the year beginning October.
If prices remained at current levels, he said, Simbhaoli would have a margin of 2 rupees per kilogram of sugar sold, which translated into a total margin of 400 million rupees in the year.
Simbhaoli also would hike its ethanol production capacity to 210,000 litres a day from 150,000 litres a day by November, he said.