India sugar drops on selling pressure

The sugar futures were on a downward trend in first part of Wednesday on continued selling pressure.
Poor buying interest in the physical market also kept the market under pressure.
However, in later part of the day, prices recovered on short covering. Market reacted to the positive statement made by agriculture ministry favouring for allowing 500,000 tons of sugar.
Market participants bought futures on hopes of likely permission for export of sugar very soon. The rise in volume and open interest will justify the buying interest in the futures market.
Outlook
The sugar futures are expected to trade on a positive note on extended buying interest. Traders and investors are likely to buy futures anticipating revival in demand ahead of summer season.
Market is reacting to the positive statement made by agriculture ministry favouring for giving permission for export of 500,000 tons of sugar under Open General License.
Farm minister said that it is time to allow sugar export to reap the benefits of higher international prices.
Looking into bumper production expectation, farm ministry is favouring for export.
According to trade sources, Indian mills have produced 13.4 million tons of sugar as on 15th February, higher by 16% Y/Y.
Derivative analysis (rise in price, volume and open interest) is suggesting a positive trend to continue on Thursday.

(Source: http://www.commodityonline.com/futures-trading/technical/India-sugar-drops-on-selling-pressure-22136.html)