Sugar may firm up
COMMODITY SPIKES
In the previous week, the near month contract on the National Commodity and Derivatives Exchange (Ncdex) firmed up by Rs 94 a quintal. Commodity analysts do not expect bearishness in the coming trading sessions.
Amol Tilak, research analyst at Kotak Commodities, said, "The production from Maharashtra could be lower than earlier estimates." Market sources said that production of sugar could be lower by around 25 per cent across the country.
Millers are reportedly selling sugar only from the free sale quota, leading to an artificial supply crunch in the sugar market. Similarly, the cost of production has gone up substantially and this will be reflected in the sugar prices.
Sugar futures opened strong on the Ncdex last week and maintained their strength for three continuous sessions before falling by Rs 30 a quintal on Thursday. They, nevertheless, closed the week at Rs 1,647 a quintal against the previous week's close of Rs 1,553 a quintal, up 6.05 per cent. The sugar futures are likely to face resistance at Rs 1,665 a quintal during this week, which, if breached, can go up to Rs 1,685 a quintal, whereas support level is put at Rs 1,630 a quintal.
The prices of maize have not declined inspite of a ban on exports. On the contrary, the maize futures crossed Rs 1,000 a quintal on the Ncdex on Saturday, with the near-month contract ending at Rs 1038.
Commodity experts expect the price of maize to remain firm due to the scanty rainfall in Karnataka and Andhra Pradesh (major kharif-maize growing states) and a possible increase in the minimum support price (MSP) to Rs 840 a quintal.
The Commission of Agricultural Costs and Prices (CACP) has made a recommendation to the government in this regard. "If MSP is increased, the base price of maize including various taxes will come around Rs 900-920 a quintal," said a trader who did not wish to be named. Market sources said the prices of maize are expected to firm up in the international market.
However, he ruled out any link with the global movement as exports from the country are banned till October 15. The near month futures on Ncdex opened strong last week and barring two bearish trading sessions, the market jumped to Rs 1,038 a quintal on Saturday against the previous week's close of Rs 974, up 6.57 per cent.