* New season to begin with much lower stocks-govt
* Failed monsoon to lower sugar recovery from cane
* India to buy up total of 100,000 T Thai sugar by Oct.
* India buys 1 mln T of raws in last three weeks
(Adds quotes from Jonathan Kingsman, London hits record)
By Mayank Bhardwaj and Lewa Pardomuan
NEW DELHI, Sept 1 (Reuters) - India extended its buying spree on international sugar markets, traders said on Tuesday, while officials warned again of ultra-low national stocks to buffer the sort of supply shortfalls seen this season.
Buying by the world's largest consumer of the sweetener has helped drive London futures prices to 28-1/2 year highs.
Farm Minister Sharad Pawar said sugar yields from India's cane crop may fall because of failed monsoon rains.
"We will be starting the next sugar season from Oct. 1, 2009 with a much smaller opening balance in comparison to the previous year," he told a conference.
Pawar did not give a number, and it was not clear if he meant opening stocks would be lower than the 3.5-4 million tonnes the government forecast at the start of July, a substantially higher figure than industry expects.
Last week, the head of the National Federation of Cooperative Sugar Factories Ltd, J.B. Patel, said India's opening stocks would be 2.7 million tonnes, down from 10 million a year ago, while a leading newspaper reported last week that stocks had already fallen to 4.5 million tonnes. [ID:nBMA005655] [ID:nDEL394013]
India's weakest monsoon in nearly four decades has hit crops from sugar to oilseeds, leading the government to relax import restrictions on sugar, encouraging a surge in imports and global sugar prices.
On Tuesday October raw sugar futures on ICE
Low stocks, barely enough to meet a little over a month's consumption, and concerns that lower crop area and diminished sugar recovery will hit next year's output have encouraged Indian firms to step up import deals for both raw and refined sugar.
"In the last three weeks, India has probably bought about 1 million tonnes of raws. India has already bought, as we heard, probably four million tonnes out of the six-million-tonne needs," Jonathan Kingsman, head of the Kingsman brokerage, told Reuters.
Kingsman had said in an interview on Monday India was estimated to have bought 900,000 tonnes of raw sugar from Brazil over the past three weeks but the latest rally in New York had blunted its appetite. [ID:nSP458829]
THAI SUGAR
Traders said India had bought up to 60,000 tonnes of Thai white sugar, with total purchases of up to 100,000 tonnes expected by October. [ID:nSP485541]
Thai firms are selling the Thai white sugar at discounts of
$5 to $10 per tonne under London's October contract
London white sugar futures soared to a record high on
Tuesday, tracking gains in ICE raws. October whites
"Our Thai sugar is going to be cheap to India," one trader with a Thai firm told Reuters. "If you ask millers they will tell you they have already sold out, but the sugar is in traders' hands and stored in warehouses."
Some Indian firms revealed their recent deals to import raw sugar.
Balrampur Chini Mills Ltd
On Monday, Simbhaoli Sugars said the company had imported 163,000 tonnes of raws this season. [ID:nDEB000940]
DIFFICULT SITUATION
Worries of rising prices and shrinking demand have mounted in recent weeks as monsoon rainfall remained weak in the key crop areas.
"The country is passing through a difficult situation due to insufficient monsoon. This has not only affected sowing of important crops like paddy but may also adversely impact sugar recovery," Pawar said.
Shree Renuka Sugars
That amounts to nearly 7 million tonnes, but industry officials say this includes about 3 million tonnes of raws purchased this year that would be processed and consumed next year.
India's sugar demand peaks around September and October when a series of Hindu festivals sharply raises the demand for the sweetener. For an analysis on India's sugar demand see [ID:nDEL465853] .
For full coverage of the global sugar rally see [ID:nN13225136]
For full monsoon coverage, see [ID:nMONSOON] . (Writing by Himangshu Watts)