Sao Paulo, April 14 - India's decision to remove temporarily a 60-percent import duty on white sugar will mean more market for Brazilian sugar, analysts said Monday.
The measure could benefit not only Brazilian exports of white sugar but also raw shipments as refineries in the Middle East -- regular buyers of Brazilian raws -- could also be suppliers of whites to India, they said.
India's Election Commission approved a proposal by the government to allow tax-free imports of up to 1 million tonnes of white sugar for the next four months. It also waived a condition to export whites in lieu of duty-free purchases of raws.
"Candidates to provide sugar are Brazil, helped by low freight rates, and refineries in Dubai and Saudi Arabia, which are close (to India)," said Plinio Nastari, director at Datagro consultancy.
"There will be a turnover in these refineries' stocks, white sugar being replaced by raws from Brazil," Nastari said.
Freight rates fell to a two-month low earlier this month due mainly to slowing economic growth, after reaching a 2009 high in March.
As India's decision is valid only until July 31, extra demand for Brazilian sugar is expected to pick up in the short term, Nastari added.
Brazil's center-south region, which started harvesting a bumper crop in March, will likely devote a bigger share of cane to make sugar than last season as returns on sugar are currently higher than those from ethanol.
Exports of Brazilian sugar are expected to rise this year due to a deepening in global sugar deficit, which has raised prices, ending two years of virtual stagnation.
"There's going to be a lot of Brazilian exports, maybe 4 million tonnes more than last season," said Julio Maria Borges, director at Job Economia consultancy. He expects shipments to reach 25 million tonnes in the 2009/10 season (April-May).
Brazil is the world's largest sugar producer and exporter.