Surplus sugar stock to keep prices under check in FY08

LONDON: India may have an exportable sugar surplus of 11.5 million tonne, raw value, in 2007-08, making significant price advances unlikely, the International Sugar Organisation said on Monday.

The ISO, in a monthly market review, said much of the surplus is expected to go into stocks. “We do not suppose that India will be able or willing to sell all the exportable surplus — a massive 6.9 million tonne are expected to go to stocks,” the report said. The ISO said India’s surplus should keep a lid on prices.

“What is clear at this still early stage of the crop cycle is that the huge surplus accumulated in India will continue to overhang the world market making any significant price advances unlikely,” it said. India is expected to overtake Brazil as the world’s top sugar producer in 2007-08, it said last month.

Earlier on Monday, SL Jain, chief executive of Indian Sugar Export Corporation (ISEC), said that India is competing against Brazil to export raw sugar to leading importer Russia, but no deals have been done yet.