Sugar faces imminent fall

COMMODITY SPIKES

The lifting of ban on export might have brought slight respite for the sugar market, but bumper production, both domestically and globally, will soon make the bull-run a short-term affair.

Analysts foresee the impact starting right from the next week. Last week saw February sugar futures precariously crossing Rs 1,600 a quintal mark and even managing to remain over this level.

The global sugar prices since October last year have dropped by more than $75 a tonne to $320 a tonne.

"The downward rally in futures can go down to as low as Rs 1,500 a quintal over the next two weeks to one month period," said a commodity analyst.

The country is expecting close to 30 lakh tonne sugar this year. Global sugar prices may see some support if more and more production in Brazil goes for ethanol production. However, on the back of falling crude prices, which came to $50 a barrel last week, this possibility appears highly unlikely.

On Saturday, the Sugar contract for February delivery closed at Rs 1,610 a quintal. Spot prices were quoted at Rs 1,640 a quintal in Delhi.