UAE Sugar im­ports at record high

The Pak Banker - - BUSINESS -

The United Arab Emi­rates, home to the world's largest port-based sugar re­fin­ery, im­ported the most raw sugar on record at the end of 2015 just be­fore Brazil and In­dia started to run low on ex­ports of the sweet­ener.

Raw sugar des­tined for the U.A.E. in the fourth quar­ter to­taled 943,000 met­ric tons, ac­cord­ing to ship­ping data com­piled by Platts Kings­man. That's the most on record since the data se­ries be­gan in the first quar­ter of 2006 and is up from 726,000 tons a year ear­lier, the com­pany said. All of the sup­plies in the most re­cent fourth quar­ter came from Brazil, the world's big­gest ex­porter, ac­cord­ing to Kings­man.

"Ac­cord­ing to the data I have, it's a record high for a quar­ter, it's not usual to have this im­por­tant quan­tity," Claudiu Covrig, se­nior sugar an­a­lyst at Platts Kings­man, said by phone Tues­day. "You usu­ally see the U.A.E. buy­ing more in the fourth quar­ter, but this vol­ume was very big."

The U.A.E. is the se­cond-largest im­porter of raw sugar in the Middle East, with in­bound ship­ments at 1.25 mil­lion tons in the cur­rent mar­ket­ing year com­pared with 1.4 mil­lion tons for Iran and 600,000 tons for Saudi Ara­bia, ac­cord­ing to U.S. Depart­ment of Agri­cul­ture data. Al Khaleej Sugar Co., based at the Jebel Ali port in Dubai, is among the world's largest re­finer­ies of the sweet­ener and says it's the big­gest port-based pro­ces­sor.

Al Khaleej Sugar de­clined to com­ment on the U.A.E. im­ports. The plant started pro­duc­tion in July 1995 and has ca­pac­ity to pro­duce more than 2 mil­lion tons of re­fined sugar a year, with stor­age ca­pac­ity of 1.5 mil­lion tons, ac­cord­ing to the com­pany. Al Khaleej and Platts Kings­man are both plan­ning sugar con­fer­ences in Dubai next week.

Raw sugar fu­tures traded in New York ral­lied 18 per­cent in the fi­nal three months of 2015, af­ter fall­ing to a seven-year low in Au­gust. White sugar traded in Lon­don has dropped less than 1 per­cent this year while raw sugar has de­clined 8 per­cent.

The U.A.E. typ­i­cally gets raw sugar mostly from Brazil, and some­times In­dia and Thai­land, Covrig said. First-quar­ter raw sugar ex­ports from Brazil's cen­tral south re­gion, which ac­counts for about 90 per­cent of the coun­try's crop, will be 300,000 tons lower than pre­vi­ously es­ti­mated, at 3.2 mil­lion tons, partly on lower avail­abil­ity and lower de­mand, he said.

Global sugar im­ports will ex­ceed ex­ports through June this year as In­dia finds it more prof­itable to keep pro­duc­tion at home, Covrig said. In­dia's raw sugar ex­ports will be 200,000 tons this year through Septem­ber, down from 500,000 tons pre­vi­ously es­ti­mated, he said. That will widen the global trade deficit in sugar to 432,000 tons in the first quar­ter and to 443,000 tons in the se­cond quar­ter, he said. Kings­man last month es­ti­mated the trade deficit at 67,000 tons for the first quar­ter and 248,000 tons for the se­cond quar­ter.

"On raws, we see a tighter quar­ter and se­cond quar­ter for world," Covrig said.

In the Middle East, Iran has the best chance of get­ting In­dia's raw sugar be­cause of a spe­cial en­ergy ar­range­ment be­tween the coun­tries, he said. "With In­dia cut­ting back on ex­ports and pos­si­bly only ship­ping to Iran in the Middle East, the other coun­tries such as Saudi Ara­bia, Syria, Ye­men, Bahrain and Iraq will prob­a­bly have to look at other ori­gins such as Brazil, Thai­land and Aus­tralia for sup­plies," Covrig said. first the

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