LONDON: The Dubai Al Khaleej refinery bought at least 300,000 tons of Indian sugars so far in calendar 2012, displacing traditional origin Brazil due to India’s cost advantages, European traders said.
The Al-Khaleej Dubai refinery was not immediately available for comment.
India, the world’s number 2 sugar producer after Brazil, has an exportable surplus this year, and a big freight advantage over Brazil for the Dubai refinery, which can potentially process up to around 2 million tons of raw sugar a year.
The Dubai refinery has in the past sourced its raw sugar primarily from Brazil. However India’s current sizeable exportable surplus combined with its freight advantage over Brazil, have led the refinery to source from India.
A weak rupee has bolstered incentives for Indian exporters. India can swing from being a net exporter to importer from year to year, depending on world prices and local weather.
“The refinery is in ‘India-mode’,” one senior European trader said. “The refinery would prefer to take Indian sugars.”
Another European trader said: “The Indian sugars that we sold recently resulted in the displacement of Brazilian raws. This shift to supplies from India is all about Dubai optimizing its book and its geographical advantage.”
The trader added: “This trading refinery has to remain nimble to optimize its performance.”
FROM: REUTERS
