Sugar: Bearish prospects

COMMODITY SPIKES

Bumper production continues to take its toll on sugar prices. The next week looks no different either as rising demand,due to the upcoming summer, is expected to be evenly matched by supply.

Last week saw sugar futures inching close to Rs 1,600 a quintal but the market could not sustain at those levels and slipped by almost Rs 40 a quintal.

According to analysts at Kotak Commodities, the demand for sugar from bulk consumers, including ice-cream makers, soft drink and chocolate making firms, is on the rise but substantial supply would check any possible rally.

They said the commodity had good support at Rs 1,545 a quintal for the April futures and the next week could see consolidation around this level. The March quota of sugar at 1.5 million tonnes is higher than the February quota.

The market would remain bearish next week, marketmen said. On the National Commodity and Derivatives Exchange, the April contract for Sugar M grade closed at Rs 1,560 a quintal last weekend against the previous week's close of Rs 1,556 a quintal.