Refinery prompts Iraq to focus on raw sugar from Brazil.

Reuters - Etihad's new sugar refinery in Babylon, Iraq, is ramping up production ahead of schedule, shifting much of the country's import needs toward raw sugar sourced in Brazil instead of white sugar, market sources said.

"The Etihad refinery has revolutionized Iraq's supply chain," said a senior market source.

A higher volume of raw sugar imports by Iraq indicates that traditional purchases of white sugar from regional refineries, such as Al Khaleej in Dubai, will decrease.

Two market sources estimated that Iraq imported at least 300 tons of sugar from the Brazilian company Alvean, a joint venture between Cargill and Copersucar, in the last six months.

A third source cited four shipments of 40 tons each from Alvean to Iraq since last year, including a ship that is expected to be loaded in Santos in the coming days.

According to the sources, all the sugar comes from Brazil.

Representatives from the Etihad plant were not available for comment.

The refinery began operating this year and is now processing around 2 tons per day, with the potential to reach 3 tons per day likely within a year, market sources said.

One source estimated that Al Khaleej has sold about 300 tons of white sugar to Iraq so far this year, compared to about 600 tons in the same period last year.

Iraq typically imports over 1 million tons of refined sugar per year.

Market sources said the refinery has increased production in recent months faster than expected.

"We were surprised by how quickly it was operating," said a source in the European market. "The refinery is functioning incredibly well."