Pakistan has said it is likely to resume imports of sugar by December to tackle a 1.2m-tonne shortfall, as a protest by cane farmers in India over prices forced parliament to adjourn.

Islamabad's Trading Corporation of Pakistan said it was awaiting government approval to begin imports of 500,000 tonnes of white sugar.

The move will help meet demand expected at 1.2m tonnes more than the 3m tonnes of sugar, in refined terms, that the country expects to produce from its domestic crop.

And it may help isolate a go-slow in sugar mills, who refusing to import raw sugar on cost grounds. Pakistan has been attempting to enforce tight controls on sugar prices.

Indian protest 

The news came as tens of thousands of cane farmers protested in New Delhi against a pricing regime they said was denying them gains the jump in local, and global, sugar prices.

They are demanding at least 215 rupees per 100kg, about $46 a tonne, for cane compared with the price of 165-170 rupees that the state obliges mills to offer.

India has been one of the drivers of the jump in world sugar prices to record highs in London, and to their highest for 28 years in New York, thanks to weak crops which have put the country – the world's biggest consumer – on course for a second year of imports.

Persistent rain in Brazil, the world's biggest producer, has been another factor, by disrupting supplies and lowering sugar yields.

Another leg higher?

Although many observers had hoped that details of Pakistan's imports would help revive the sugar rally, prices fell on Thursday, hurt in part by a stronger dollar.

A stronger greenback makes dollar-denominated assets less competitive on export markets.

New York raw sugar for March closed down 2.4% at 22.60 cents a pound, with London white sugar finishing down 2.6% at $608.40 a tonne.

Nonetheless, many analysts remained upbeat.

"Corrective breaks look like buying opportunities," Terry Roggensack, at the Hightower Report, said.

"It will take a major change in the sentiment for the US dollar to drive traders away from commodity markets, and sugar is a market with additional upside potential due to a tightening supply scenario into 2010.

"Wetter weather in Brazil and improved demand from India look to help support a continued short term uptrend and possibly another leg higher in sugar into 2010."