SINGAPORE, May 4: Pakistan is turning to India to satisfy its sugar cravings and cover a shortfall in domestic supplies, while Vietnam is in the market to buy 150,000 tons of sweetener for shipment no later than August.

But Indonesia, Southeast Asia’s largest consumer, is likely to avoid the market this year because of expectations of increased sugarcane output, industry officials said on Thursday.

“High prices have encouraged farmers to grow sugarcane and expand their plantations,” said Adig Suwandi, corporate secretary at the state plantation firm PTPN XI.

Indonesia has scrapped a plan to issue more permits to buy white sugar this year due to ample stocks, and some officials said it might even hold back on purchases in 2007. Jakarta issued a total of 300,000 tons of white sugar import permits last October.

“If it has to buy sugar at all, then the amount won’t be more than 150,000 tons,” Suwandi told Reuters in Jakarta, adding that the sweetener would only be used as a buffer before the crushing season begins in April or May next year.

Indonesia’s white sugar production is likely to rise to 2.48 million tons this year from 2.24 million tons in 2005 as strong global prices lead to increased sugarcane production.

Raw sugar prices rose over 60 per cent last year and spiked to a 25-year high of 19.73 cents per lb in February. Indonesia’s annual consumption is estimated at 2.6 million to 2.7 million tons in 2006, steady from last year.

Dealers said India was more than happy to sell sugar to Pakistan because it will likely have an annual surplus of around three million tons over the next few years as a result of healthy crops boosted by monsoon rains.

India is expected to export more than one million tons of sugar in the crop year to September 2006, with half of the shipments going to Pakistan, said dealers.

Pakistan, which devours 3.8 million tons of sugar a year, has been a steady buyer in the international market after output dropped to 2.6 million tons in this production year from 3.2 million tons previously as farmers switched to other crops with better returns.

A government estimate shows Pakistan will need at least 800,000 tons of imports in 2006 to meet domestic demand.

A total of 325,000 tons of sugar, mainly from Indian mills, were booked during January to March by Pakistani traders, said Raees Ashraf Tar Mohammad, a Karachi-based commodity importer.

“The prices were between $470 and $485 per ton, cost and freight Karachi. A number of cargoes have reached Karachi while many are due to arrive in May and June,” he said.—Reuters