Dubai-based Al Khaleej Sugar Company will not expand its refinery this year because adding capacity would require closing down at a time when demand for white sugar is high, an executive said on Thursday.

Al Khaleej, the largest refinery in the world, had plans to increase its capacity from 1.5 million tonnes of white sugar production per year to 2 million tonnes.

'We had never set a date for this plan, but we will not be doing it this year as demand in the market is strong and increasing capacity would require us to shut down our refinery,' Cyrus Raja, corporate affairs manager at Al Khaleej told Reuters.

Strong physical demand in the market had boosted white sugar prices, London's August white sugar was up 10 cents a lb at $590.00 per tonne at 0804 GMT on Tuesday.

'I believe that the [whites] differential to raws will stay strong this year and demand levels are much higher than the supply, and once the demand weakens we will go ahead with the refinery expansion,' Raja added.-Reuters