Dubai: A flood of sugar from India, has pressured Dubai’s prime refiner to halt output for nearly two months due to weak demand for its sweetener.
Al Khaleej Sugar, restarted operations on Thursday after being closed since mid-December, managing director Jamal al-Ghurair mentioned in an interview in Dubai. He blamed Indian sugar for miserable costs and boosting competitors in areas that Al Khaleej provides.
India is on observe for a document crop this season, extending a worldwide surplus right into a second 12 months. Planting cane there stays worthwhile, at the same time as millers wrestle to pay farmers, partly because of authorities subsidies which might be serving to the trade address extra provide.
The Indian sugar “is hitting many of the Indian Ocean market, subsidised by the Indian authorities,” al-Ghurair mentioned. “With India on board, how will you get a regional premium?”
India has solely exported a fraction of the 5mn metric tonnes its authorities expects millers to ship. That’s nonetheless sufficient to harm Al Khaleej gross sales, al-Ghurair mentioned earlier than the beginning of the Dubai Sugar Convention.
“With this a lot, we’re already in bother,” al-Ghurair mentioned, citing Indian exports of about 1mn tonnes because the begin of the season in October. “Indian sugar has not come out thus far, it’s going to come back out later. That’s the worst half.”
The stress of extra Indian sugar is amplifying the lack of some markets that had been beforehand vital to Al Khaleej. The Dubai refinery now not ships to Iraq after the Etihad refinery began operations there, and a broader refining growth within the Center East is shrinking premiums. —Bloomberg