|
| Sugar futures hit record overseas, but decline in India |
| Dilip Kumar Jha / Mumbai Sep 30, 2009, 00:59 IST |
|
London white sugar futures today rallied over 3 per cent to a record high and benchmark ICE raw sugar surged on worries over excessive rain during harvesting in Brazil and tight supplies in Mexico.
London white sugar futures hit a record peak of $617.70 a tonne and then lost a little ground to stand at $615.3, up $21.8 or 3.7 per cent, in modest volume of 2,172 lots at 1147 GMT. The benchmark ICE March raw sugar futures contract surged to break above key psychological resistance at 25 cents a pound to stand at 25.15 cents before easing back to 24.91 cents, up 0.81 cent.
Nagging worries over the impact on sugar supplies from top producer Brazil due to persistent and excessive rain, combined with expectations of further demand by Mexico, the US and India, have fuelled bullish sentiments in sugar.
However, the global blips failed to replicate at Indian markets where prices closed range-bound.
For naka delivery, S 30 and M 30 closed in Vashi at Rs 2,800 a quintal and Rs 2,820 a quintal respectively. For mill delivery, however, S 30 and M 30 ended between Rs 2,700 a quintal and Rs 2,740 a quintal respectively.
“Unlike overseas, sugar is a politically sensitive commodity here. Since, the assembly elections are near, the government will do its best to control sugar prices atleast till the elections. After that the government would not be able to control price rise which would surely go up atleast by Rs 100 a quintal,” said Rajendra Shah, Partner of Hitendra Kumar Thakarshi & Co, a Vashi-based sugar trading company.
The commodity fell by 100 a quintal in Delhi due to a rise in supplies from anticipated beverages companies that had been asked to hold stocks only for 15 days. According to industry sources, they held stocks for upto three months of their consumption thereby, releasing extra stock to the market.
Prices are likely to move up since India will end up with about 7 million tonnes of deficit during the ensuing crushing season (October 2009-September 2010). But, the government will not let the price move up freely, said B J Maheshwari, director and co-secretary, Dwarikesh Sugar Industries.
Refuting the government’s plan to commence crushing early this season by the first week of October as against the last week of the month, Maheshwari said that the sucrose content in the standing cane crop hovers at 6.5-7 per cent in Uttar Pradesh and Maharashtra.
Crushing cane with such a low recovery will result into huge loss for mills. Hence, mills are unlikely to begin crushing before the first week of November by when the recovery is expected to become normal.
India’s sugar production is estimated at 16 million tonnes during the season 2009-10 against a consumption of 23.5 million tonnes. Last year also, the country witnessed a production deficit of about 9 million tonnes which was met through an equal carryover stock.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
