Al Khaleej Sugar Co., the world’s largest sugar refinery, is selling raw sugar from Brazil back to the world market as it expands purchases from India, according to Fazalur Rahman, general manager of finance.
The Dubai-based refinery, which buys raw sweetener to process into the refined variety, has sold 150,000 metric tons of Brazilian raw sugar back to the world market so far this year, Rahman said in an interview at a conference in London today. Al Khaleej has bought almost 100,000 tons of sugar from India this year and will purchase more, he said.
“If the market is in our favor, we would like to buy as much as we could,” he said, referring to sweetener from India. “Indian sugar is replacing Brazilian feedstock, and what we do is sell the Brazilian sugar.”
Buying Indian sugar is about $20 a ton cheaper than purchasing the sweetener from Brazil, Jamal Al Ghurair, managing director of the company, said in an interview in Dubai on Feb. 4. The last time Al Khaleej tapped supplies from India, three to four years ago, it bought almost 600,000 tons, Rahman said.
Al Khaleej is selling its output at $60 to $80 a ton above prices on NYSE Liffe in London, Rahman said. This premium has been falling because of competition from India, the second-biggest producer, and Thailand, the second-largest exporter, he said. The season started in October in India and a month later in Thailand.
Refined, or white, sugar for May delivery rose 0.9 percent to $649.30 a ton by the 5:30 p.m. close on NYSE Liffe. Raw sugar for May delivery was last up 0.7 percent to 24.65 cents a pound on ICE Futures U.S. in New York.
The refinery will close in about two weeks as the company is expanding storage capacity, Rahman said. It will be shut for three to four weeks, he added.