NEW DELHI, Sept 6 (Reuters) - India has sealed deals to
export 176,000 tonnes of sugar to sanctions-hit Iran so far this
year and a vessel with 32,000 tonnes of that, the last
consignment, is being loaded at a southern port, trade sources
said on Thursday.
"Of the 176,000 tonnes, about 146,000 tonnes have already
been moved out of the country. Most of these deals have been
through Dubai-based traders," one of the sources said.
Although western sanctions aimed at curbing Iran's nuclear
ambitions do not prohibit food imports, they have made payments
by and to Tehran more difficult.
India is Iran's second-largest crude oil buyer and has
struggled to find ways to pay for the oil. The two countries
agreed in January to settle 45 percent of the oil trade in
rupees and are also making some payments through a Turkish bank.
But some Iranian buyers are channelling import payments
through unofficial routes involving several layers of middlemen
based in Dubai.
India, the world's top sugar consumer and the biggest
producer behind Brazil, kicked off exports to the Islamic
Republic in March.
Iran's Trading Corporation has been floating tenders to buy
sugar and has also bought from Brazil.
India's sugar exports would total 3.3 million tonnes this
year, including stocks at ports, but a surge in local prices and
a steep drop in global rates have dissuaded traders from signing
fresh contracts since July, the second source said.
"Some of the last export contracts were signed at $550-$600
a tonne," he said.
India's benchmark sugar prices have risen 20 percent
to $650 a tonne s ince July 1, while international prices in New
York have slumped more than 9 percent in the past two
"With the rise in prices here and a fall in prices
internationally, exports have become unviable and some Indian
sugar traders have washed out their contracts," the second
Local traders have cancelled - or "washed out" - on about
200,000 tonnes of sugar, traders said.
The washouts - in which buyers give up the obligation to
take delivery by paying a penalty - have been confined to local
millers and traders, the trader said, adding dealers have not
reneged on global export deals.
But traders could go back on their global contracts.
Indian sugar exporters are in talks to cancel sales of more
than 500,000 tonnes of white sugar currently.
(Editing by Jo Winterbottom and James Jukwey)