Countries in Asia like the Philippines and Indonesia are mulling spikes in tariff rates while India, the world's biggest consumer of sugar, has raised tariffs to hinder an influx of excess sugar seeking to find homes.

Analysts in New York said that if other countries push through with proposals to raise tariff barriers as well, sugar prices will likely be pounded anew as more of the stuff sloshes onto a glutted market. "It will be bearish because those countries will be disinclined to purchase sugar and demand is already weak," Ann Prendergast, softs analyst at Refco Inc, told Reuters in a telephone interview.

Marius Sonnen, president of Sonnen and Co Inc in New York, said countries like the Philippines and Indonesia are seeking to protect domestic industries feeling the pinch from cheapsugar in the world market. The impact of spikes in tariffs means there will be less demand for world sugar at a time when surpluses are seen reaching up to 3.44 million tonnes in 1998/99, according to the International Sugar Organization.

Trade house ED & F Man has pegged the surplus in 1998/99 at 5.51 million tonnes raw value from a January forecast of 4.62 million. Czarnikow Sugar has said that world stocks will likely balloon to 6.23 million in 1998/99. "It will put more pressure on prices," Sonnen said. World raw sugar prices have barely recovered from a severe downturn which saw benchmark sugar prices skid to a 14-year low at 3.93 cents a lb on April 28. Benchmark October sugar settled 0.10 up at 5.52 cents a lb on Thursday.

Faruk Bakrie, the chairman of the Indonesian Sugar Association, told delegates at a sugar conference in the central Philippine city of Cebu that pressure is building on Indonesia to curb sugar imports with a tariff of 65 per cent to stem the flow of imports. Philippine sugarofficials are also mulling sugar import tariffs to enable its farmers to block the influx of imports. India has progressively raised tariffs to 25 per cent plus a 10 per cent surcharge, but the rate of arrivals has risen due to sharp falls in world prices. Asia is vital because until the financial crisis of 1997, it was the chief motor for growth in world sugar demand.

The situation is not helped any by the fact that the United States and the European Union have themselves pursued policies designed to protect their own domestic industries. "A pound of sugar in the grocery here costs about $ 2.50 or so. What's the price of sugar in the world market? Five cents. Do the math," said one broker.

Arthur Stevenson, analyst for Prudential Securities in New York, said the imposition of steep tariffs would further "impede unfettered trade" in a market already dominated by the heavy hand of government regulation. "That would not be helpful to the (market's) upside," he said.

Asian sugar millers and planters urgedrich nations on Friday to scrap protectionism, accusing them of hurting sugar industries in developed countries. In a "cry for understanding", industry delegates from India, Pakistan, Indonesia, Thailand and the Philippines resolved at the end of a sugar conference to lobby for "harmonised" tariff cuts. A manifesto signed by heads of delegations called on their governments to pursue the issue in world trade talks in November. "A dialogue should be started that will allow the survival of average cost producers and the extension of export subsidies that undermine the objectives of the WTO," the manifesto said.