Egypt's state-owned Sugar and Integrated Industries Company (SIIC) said on Thursday that it had cancelled a tender to buy 300,000 tonnes of raw sugar for local consumption due to volatile prices. "The prices are not suitable for the local market," a company official, who declined to be named, told Reuters. "Global prices are still going down. We will wait until the prices are stable," he added. The company earlier said it had bought 50,000 tonnes of raw sugar, bringing this week's total purchase to 140,000 tonnes, which the SIIC official said was for re-exporting, not for local consumption. Benchmark raw sugar futures slid to 7-month lows on Wednesday, after falling more than 35 per cent from their 29-year peak set on February 1. Investor long liquidation, combined with increased estimates for output in the world's no. 2 producer India and reports of defaults on physical deals, fuelled the drop in prices. Egypt said on January 6 it would import 1 million tonnes of raw sugar to meet demand in the second half of 2010 and to meet its reserve quota for the beginning of 2011. The SIIC official said the company had not bought any sugar for local consumption so far this year but added there may have been other purchases by other importers. The country consumes around 2.8 million tonnes of sugar a year and produces 1.6 million tonnes. Some 63 million of Egypt's 78 million people are covered by subsidy card programmes through which sugar is available at reduced prices. Trade Minister Rachid Mohamed Rachid had said higher world prices would push Egypt's sugar subsidy bill in 2009/10 up by more than 70 percent to 4 billion Egyptian pounds.
