Morocco seeks to produce over half its sugar needs

CASABLANCA, March 31 (Reuters) - Better irrigation, farming techniques and refining technology should allow Morocco to produce over half the sugar it consumes in coming years, the head of local sugar producer Cosumar (CSMR.CS) said on Monday.

The North African kingdom imports between 650,000 and 700,000 tonnes of sugar per year, representing 55 percent of its national requirement, Cosumar Chief Executive Mohammed Fikrat told reporters in Casablanca.

The incentive to become more self-sufficient in sugar has grown after world market prices soared because the Moroccan government subsidises imported sugar to cut retail prices to levels affordable for its population.

Cosumar, 55-percent owned by Moroccan conglomerate ONA (ONA.CS), has acquired four underperforming state sugar refineries and is investing 1.6 billion dirhams ($219.8 million) over five years to expand domestic cane and beet growing and boost industry competitiveness.

A programme to improve sugar yields aims to take domestic production to as much as 700,000 tonnes from 450,000 per year currently, Fikrat said during a results presentation.

Given that local demand is growing at 20,000 tonnes per year, "our rate of coverage should rise to 55-60 percent in the best case scenario, if we manage to develop all the possibilities to improve productivity," he said.

The area being cultivated for sugar this season is 57,678 hectares, he said, a figure up 12 percent from the previous season when agriculture suffered a severe drought.

Beet provides three quarters of the sugar grown in Morocco. Imported raw sugar, mostly Brazilian cane sugar, is imported and refined at Cosumar's Casablanca refinery.

"Today raw sugar prices are very volatile -- we must pay $400 to $420 dollars per tonne for sugar delivered to our factory in Casablanca," said Fikrat.

Fikrat said domestic sugar yields varied from 5 to 8 tonnes per hectare, compared to 12 tonnes for some European countries.

"Our ambition is to generalise productivity of over 8 tonnes," he said.

The company's sales grew 6.9 percent last year to 5.46 billion dirhams while net income grew to 429.2 million dirhams from 264.5 million in 2006. ($1=7.280 Moroccan Dirham) (Reporting by Tom Pfeiffer; Editing by Christian Wiessner)