MV UBC OTTAWA, the world’s largest sugar carrying vessel, calls at DP World’s flagship Jebel Ali Port (file). Al Khaleej has 1.5mn metric tonnes of sugar stockpiled at or in transit to its refinery in Dubai, managing director Jamal al-Ghurair said in an interview at the Platts Kingsman sugar conference in Dubai.

Bloomberg/Dubai


Al Khaleej Sugar Co, the Dubai-based refiner, has enough supply on hand to meet demand for most of this year amid signs that global oversupply will cap price gains this year.
Al Khaleej has 1.5mn metric tonnes of sugar stockpiled at or in transit to its refinery in Dubai, managing director Jamal al-Ghurair said in an interview at the Platts Kingsman sugar conference in Dubai. The plant is operating at 60% of capacity, he said.
“There is a lot of supply,” and inventories are “near a record,” al-Ghurair said on Sunday. “We’re getting shipments all the time.”
Sugar surpluses have prevailed for most of the past five years, causing futures to fall 59% from a 30-year high in 2011. Supply will fall short of demand by 122,000 tonnes for the 2014-15 season that started on October 1, after a surplus of 5.6mn tonnes a year earlier, Platts Kingsman said on Sunday.
Raw sugar futures dropped 0.3% to 14.74 cents a pound at 12.34pm Dubai time yesterday on ICE Futures US in New York. Prices probably won’t trade any more than 2 cents up or down for the rest of the year as oversupply will limit gains and buyers will keep prices from falling too low, al-Ghurair said.
Prices decreased almost 12% last year as the global glut pushed prices to the lowest since 2008.
Global sugar production will drop to 177.1mn tonnes in 2015-2016 from 179.1mn tonnes a year earlier, according to Platts Kingsman. Consumption will advance 1.7% to 182.3mn tonnes, below the 10-year average of 2%, partly because low crude prices will curb demand for imports by some oil producers, Claudiu Covrig, a Platts Kingsman analyst, said on Saturday. That would leave the biggest shortage in six years, at 5.2mn tons, according to Covrig in a report.
Low oil prices have had “no effect” on demand at Al Khaleej, al-Ghurair said. Brent crude has tumbled 51% in the past year amid a global supply glut.
Al Khaleej is ready to consider buying more sugar from India, al-Ghurair said. About 80% of its raw sugar comes from Brazil, the world’s biggest supplier, he said.
India is said to be considering an export subsidy of 4,000 rupees ($65) a tonne on raw sugar, according to two government officials on January 27 who asked not to be identified because the proposal is confidential.
“We are waiting for India,” al-Ghurair said. “It all depends on the price.”

New refinery to start operations in Saudi


A new sugar refinery is due to start operations in Jizan in southwest Saudi Arabia by the end of 2017, adding to a stream of projects that will significantly raise the Middle East’s refining capacity.
“At the moment the design is complete and financing is ready and we will start scratching the ground in April this year to hopefully produce sugar by the end of 2017,” Sufian Ibrahim, project manager of Al Reef Sugar Refinery, told Reuters on the sidelines of the Platts Kingsman Dubai Sugar Conference. Substantial new capacity for sugar refining is expected to come on stream in the next few years with projects planned in Oman, Saudi Arabia, Iraq and Algeria. The region’s consumption stands at 15mn tonnes a year, with a refining capacity of 12.5mn tonnes. At full capacity, Al Reef is expected to refine 3,000 tonnes of sugar a day, and plans to export two thirds of its production elsewhere in the Middle East. The company plans to go public after five years of production. Al Reef will initially refine raw imported sugar, but in the long term it plans to acquire agricultural land in East Africa to grow its own cane sugar crop.



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