London, July 28 - India is expected to import up to 5 million tonnes of sugar in 2009/10 due to strong domestic demand and sharply lower output, merchant Sucden Financial said on Tuesday in its quarterly market report.
Sucden sees the world's top sugar consumer producing slightly less than 17 mln tonnes in 2009/10, while its consumption is set to grow to 23.5 million tonnes.
That means India's deficit gap could be 6.5 million tonnes, Sucden said.
"As such, India will have no other choice than to import substantial quantities (up to 5 million tonnes) to keep its domestic market supplied throughout the crop year," Sucden said.
India faces a second year of hefty sugar imports after a weak monsoon, putting the country on course to increase its purchases and potentially displace the EU as the world's biggest buyer.
Sugarcane planting in India has fallen 2.5 percent so far this season but output may fall more steeply, widening India's sugar deficit and increasing prospects of imports.
Sugar futures are expected to top recent three-year highs by the end of 2009 on strong import demand from India, the median forecasts in a mid-year Reuters poll of 13 analysts showed recently.
Sucden said Brazil's centre-south crop may help supply India's demand, but noted that the bulk of the Brazilian crop is still to come.
Brazil's 2009/10 center-south cane crush was up 19 percent by July 16 from a year ago but the total crush this season will likely fall short of expectations due to rains, the Sugar Cane Industry Association (Unica) said on Tuesday.
"Some concerns about the disappointing quality of the cane (from Brazil) and an eventual El Nino phenomenon bringing more rains in the second half of the year have already surfaced," Sucden said.
"Any reversed trend in centre-south Brazil performances should continue to impact on the upside the world sugar market in the coming months," Sucden said.