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“The refinery is demand driven,” Jamal told Reuters in a telephone interview. The refinery is well located to serve regional markets, and the expansion will increase the flexibility of its operations, he said. He added that works are currently under way and that he aimed to increase white sugar storage capacity to 150,000 tonnes by October 2005, against 35,000 tonnes now.
Raw sugar storage capacity is expected to remain unchanged at around 1.1 million tonnes as there were no plans to expand raw sugar silos, Jamal added. Jamal, whose refinery is a bidder in Iraq’s mid-June tender to buy around 100,000 tonnes of high-quality white sugar, said Iraq had not yet agreed to buy any sugar. “They have not signed up yet,” he said. He said he believed Al Khaleej was one of four bidders in the tender. He gave no further details. Iraq held the tender for the sugar around June 17-18, trade sources said.
Some traders said Iraq currently requires a big quantity of white sugar promptly after previous deals fell through. They said they believed Iraqi authorities had not bought sugar for some months. Jamal said availability of prompt white sugar was very limited and that speculators had driven the recent surge in white sugar futures, but he believed the market was overbought and that prices were now too high to attract cash demand.
“There is a huge tightness in the nearby,” he said.
“It is because people have delayed purchases.”
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