Sugar shortfall twice as big as expected: ISO

MARCH 8- Global sugar production will fall short of demand this year by twice as much as initially expected, the International Sugar Organisation (ISO) said, citing declining stockpiles and growing demand in Russia. The shortfall will be 2.225 million metric tonne in 2005-06, the London-based ISO said in a report late On Tuesday, compared with a November forecast of 1.015 million tonne. Raw sugar prices have almost trebled in the past two years on the New York Board of Trade, as unfavorable weather hurt crops in Brazil and Thailand, the biggest exporters. Prices also rose as stockpiles in 2005 declined for a third consecutive year. The shortfall was 3.726 million tonne in 2004-05. Traders reported an increase in physical raw sugar buying by Russia, as import margins have become profitable due to a sharp hike in domestic prices. Pakistan, Vietnam and Bangladesh were reportedly buying sugar actively in February, the ISO said. Raw sugar production in Brazil, the worlds biggest producer and exporter, in the crop year ending in April will be 28.5 million tonne, compared with 26.7 million tonne the year before, the ISO said. Output may rise to 30.4 million tonne next year, it added.