Sugar mills step in to cool prices

       India, importing sugar for the first time in three years, said yesterday mills agreed to boost the availability to cool record prices.
       "The mills are ready to find some solution where we will be able to improve availability in the open market and in the public distribution system," Farm Minister Sharad Pawar said told reporters after meeting producers in New Delhi.
       Sugar has advanced 62% this year in Mumbai's Vashi, the largest wholesale market, on concern drought in the biggest cane-growing states will curb prospects for the Indian crop, the world's secondbiggest.
       The monsoon, which brings threequarters of the nations annual rains,may be the driest in 15 years, the weather bureau said last week.
       "Production may drop to 14.8 million tonnes in the year ending September,from 26.4 million tons," said Samir Somaiya, president of Indian Sugar Mills Association, repeating a previous forecast.
       The nation consumes 22.5 million tonnes annually.
       India has contracted to import 2.9 million tonnes of raw sugar so far this year, Pawar told the parliament last week.
       Sugar reached a 28-year high of 23.33 cents a pound in New York on Aug 12 and was at 21.51 cents in after-hours trading at 4 p.m. Mumbai time yesterday.Prices in Vashi jumped 4.5% to 3,082 rupees for 100 kilograms after dropping 3.2% on Aug 14.
       "Output in the year starting Oct 1 may be 18 million tonnes," Vinay Kumar,managing director of the National Federation of Co-operative Sugar Factories Ltd, said last week.
       His forecast is higher than 16.5 million tonnes predicted by Maharashtra State Co-operative Sugar Factories Federation Ltd, and 15 million-to-16 million tonnes estimated by Bajaj Hindusthan Ltd.
       To be sure, rains have returned in the northern and central Indian states the past few days, helping ease dry weather thats caused drought in as many as 209 of the country's 626 districts, the weather office said yesterday.
       Uttar Pradesh, the biggest cane grower,Madhya Pradesh, the largest soybeans producer, and Bihar, a top grower of rice and corn, received good rain over the past few days, Ajit Tyagi, director general of the India Meteorological Department, said.
       Sugar fell for a second day in London on speculation recent rain in India will improve prospects for the harvest in October. White, or refined, sugar for October delivery lost 1.6% to $544.2 a metric tonne by 11.22 a.m. on the Liffe exchange.