NEW DELHI (Commodity Online): India has decided to extend the period of duty free Sugar imports beyond expire date of November 30, in order to ensure the availability of the sweetener in the domestic market and containing rising prices.

India’s Agriculture Minister, Sharad Pawar said that the government decided to extend the period of duty free sugar imports so as to offset the shortage due to a fall of more than 40% in domestic output to about 15 million tonnes.

Subsequently, the prices of sugar in the domestic market went up about 55% in 2009. The domestic sugar prices were expected to soften from the end of October, he added.

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“The extended monsoon season would boost sowing prospects for winter-sown crops such as Wheat by improving soil moistures”, said the Minister. A lower area for summer-sown rice would Lead to higher area for wheat, the main winter-sown food crop.

Meanwhile, industrial players said that the move may not result in increased import volumes, as global prices are out of range for Indian buyers and a new Sugar cane crop will soon be ready for crushing, which will reduce the country's refined sugar shortfall.

India's white sugar output will likely total 15 million metric tons in the marketing year ending Sept. 30, sharply lower than last year's 26.3 million tons, according to industry estimates.

The shortfall in the world's biggest sugar consumer coincides with reduced global supplies, and hence higher prices. Liffe white sugar futures for December in London are priced around $585/ton compared with prices around $390/ton a year ago.

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