LONDON: Dubai's Al Khaleej Sugar Co. refinery concluded a deal last week to buy 500,000 tonnes of Indian raw sugar for delivery spread over the 2007/08 crop year, the refinery's general manager Cyrus Raja said on Wednesday.
He said in a telephone interview from Dubai that the refinery has contracted to buy a total of about one million tonnes of Indian raw sugar so far. He gave no details of prices.
Raja said the first Indian raw sugar delivery, which was contracted months ago, was expected to reach Dubai in about one week's time. Asked whether the Dubai refinery would buy more Indian sugar, Raja said: "It's possible." Trade sources said there was little difference between the price offers of raw sugar arriving in Dubai from key origins India or Brazil, the world's largest exporter, after factoring in freight.
Indian raw sugar is offered at a premium of 135-140 points over ICE March futures, while Brazilian raw sugar is offered at a discount of about 75 points (0.75 cents per lb), the trade sources said.
However, freight to Dubai from India is about $40 per tonne cheaper than from Brazil, the trade sources added. Soaring freight rates, driven primarily by China's appetite for commodities to power its rampant economic growth, have given a strong advantage to commodity exporters in regional markets.
India, which used to be a net importer of sugar, has emerged as a major exporter on the world market this year. India is the world's largest sugar consumer.
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