Dubai-based Al Khaleej Sugar Co  will continue to rely on Brazil for raw sugar and will not seek alternative suppliers, its chairman said on Tuesday.

Al Khaleej, the world's largest sugar refinery, imports almost all of its raw sugar from Brazil through long-term supply contacts.

A poor harvest of sugar cane in Brazil, the top producer of the sweetener, has tightened supplies in the market.

'We are not looking at other sources to get raw sugar, Brazil will still be our supplier and talk in the market about not enough supplies from Brazil is all hype from traders who want prices to rise further,' Jamal Al Ghurair told Reuters in a phone interview.

Raw sugar futures more than doubled in 2009, and have touched a series of 29-year highs this year, propelled by Indian demand and by poor crop yields in top exporter Brazil after heavy rains disrupted harvesting.   

Al Ghurair declined to forecast a specific price range for the future, saying only that he expects prices to continue to climb in the Middle East.
   
'Consumers in the Middle East will experience further increases in sugar prices because most of the markets have free trade and governments don't subsidise sugar,' he said.

In Iran, the top legislative body approved a plan to phase out food subsidies last month.

In the United Arab Emirates the economy ministry has held meetings with supermarket outlets urging them not to raise prices of basic commodities, traders told Reuters.

'But there are certain goods like sugar that we can't really reduce the price on because that would mean a loss to the business,' said Abraham George, manager at Baniyas Cooperative Society in Abu Dhabi. - Reuters