Indian sugar futures rise on delay in cane crushing
November 20, 2012
Indian sugar futures rose on Monday in choppy trade as an expected delay in cane crushing in the top two sugar-producing states offset higher supplies by mills amid lacklustre demand in spot markets. The key December contract on India’s National Commodity and Derivatives Exchange ended up 0.15 percent at 3,336 rupees per 100 kg.
“Demand has declined a bit after Diwali and sugar prices will take cue from the December quota. Most traders are waiting to see the outcome of a standoff between cane growers and sugar mills over cane prices,” said Mukesh Kuvadia, secretary, Bombay Sugar Merchants Association.
Usually, most factories in Maharashtra state, India’s top sugar producer, start cane-crushing by the first week of November, but it has been delayed this year as farmers and mills have not agreed on prices. In the northern state of Uttar Pradesh, both farmers and mills are waiting for the government to announce a state advised-price for cane.
Sugar rose by 11 rupees to 3,475 rupees per 100 kg at the Kolhapur spot market in Maharashtra. The government has asked millers to sell 4 million tonnes of sugar in the open market during October and November, higher than the average monthly allocation of around 1.7 million tonnes. India’s sugar output in the 2012/13 crop year, which started on October 1, is likely to fall to 23.5-24 million tonnes from 26 a year earlier.