January 01, 2013
Indian sugar futures were treading water on Monday as higher supplies and subdued demand outweighed hopes the government will raise tax on imports of the sweetener to protect local mills. As of 0828 GMT, the benchmark February sugar contract on the National Commodity and Derivatives Exchange was up 0.09 percent at 3,280 rupees ($59.84) per 100 kg.
“Supplies are comfortable. They are putting pressure on prices,” said Badruddin Khan, associate vice-president of research at Indiabulls Commodities Ltd. “The government will do something to protect local sugar mills. It can raise the import duty. It has to do something as the production cost of mills has risen due to the rise in cane price,” Khan said. India is expected to decide on raising the import duty by year-end, Food Minister K.V. Thomas said on December 13, as lower prices in the world market made room for such imports in the past two months.
Demand for sugar from bulk consumers like cool drink and ice cream makers usually drops during the winter season. Indian sugar mills produced 4.9 million tonnes between October 1 and December 15, up 2 percent from a year earlier. Sugar fell by 12 rupees to 3,261 rupees per 100 kg at the Kolhapur spot market in the top producing Maharashtra state.