Indian sugar futures fall to near one-month low
November 23, 2012
Indian sugar futures fell on Thursday to their lowest in nearly a month on subdued demand and higher supplies, though the slow pace of cane-crushing in key producing areas limited the downside. At 1038 GMT, the key December contract on India’s National Commodity and Derivatives Exchange was down 0.82 percent at 3,266 rupees ($59.06) per 100 kg, after falling to 3,265 rupees earlier in the day.
“Wholesale demand is weak. Retail demand is also weak as the festival season is over,” said a member of the Bombay Sugar Merchants Association. “Many sugar mills are still holding significant stocks from the November quota. They are under pressure as they need to sell their stocks in a week.”
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. Sugar fell by 12 rupees to 3,450 rupees per 100 kg at the Kolhapur spot market in top producing Maharashtra state.
Most factories in Maharashtra start cane-crushing by the first week of November, but it was delayed this year by a fortnight as farmers and mills could not agree on cane prices. In the northern state of Uttar Pradesh, both farmers and mills are waiting for the state government to announce the state-advised price for cane. 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 million tonnes a year earlier.