He said Indian sugar becomes attractive for exports when international prices rise above $250-$255 a tonne. March white sugar on the London futures market was quoted at $246.5 a tonne on Friday. Traders said this week Indian mills had sold around 84,000 tonne of sugar to international trading houses between $253-257 a tonne FOB. Managing director of the National Federation of Cooperative Sugar Factories Vinay Kumar said new markets are emerging in Indonesia and the Philippines, and Pakistan needs plenty too.

The industry planned to send a delegation to Indonesia, which needed about 300,000-400,000 tonne of sugar, he said. With the recent deals, India's sugar exports have reached 350,000 tonne since last August, when it began exports to cut a 10-million tonne stockpile. The Indian Sugar and General Industry Export Import Corp Ltd, a private body that exports sugar on behalf of the industry, sold 14 cargoes of 12,500 tonne each in August last year.

But there has not been much activity since then due to a fall in global sugar prices. "Overall exports should be bright...most of the Thai and Brazilian sugar has been priced. It is only the Indian sugar that is left in the market," said Mr Yatin Wadhwana, a leading sugar trader. He said Pakistan had already bought 600,000 tonne of sugar from various parties since last April and needed another 700,000 to 800,000 tonne by October.

India had sold around 200,000 tonne to Pakistan since September, of which 150,000 tonne had been physically moved out.

India moves sugar to Pakistan mainly by railway through the northwestern state of Punjab. Mr Kumar said a shortage of rakes was leading to congestion at the border and the sugar Federation had written to the railways to facilitate faster movement. Earlier this month, India announced it was cutting to 15 per cent from 30 per cent the quota of output mills, supply to the government at cheaper rates effective from April 1. The reduction in the quota is a measure to gradually ease state controls on sugar supplies in line with recommendations of an expert panel in 1998. Media reports said Food Minister Shanta Kumar had agreed to implement the new decision from February 1 instead of April because the bulk of the cane crushing for the current 2000/01 (Oct-Sept) season would be completed by then.

Analysts said the recent government measures would bring down India's domestic prices and boost sugar exports. Mr Kumar said the Pakistan government turning down an industry demand for higher sugar import duties would help Indian sales. The Indian industry has been under pressure to trim stocks ahead of another expected bumper crop. India's sugar output hit a record 18.2 million tonne in the crop year 1999/2000 (Oct-Sept) compared with 15.54 million tonne a year earlier.

(Reuters)