Sugar rises on fresh buying

Mixed sentiments prevailed across Sugar markets on Wednesday with spot prices ending marginally lower by 0.14%, whereas, futures closed higher by 0.68%.
After testing a low of Rs. 2795 per qtl levels, Sugar futures bounced back and touched a high of Rs. 2843 per qtl after the positive statement of farm minister on sugar exports.
As per latest statement of Farm Minister, Indian government can once again re-think on white sugar exports in order to take the benefit of high global prices.
ICE Raw Sugar futures as well as Liffe White Sugar futures ended lower by 3.55% and 2.28% respectively as the market have absorbed the fact that production in Brazil and Thailand may not be too short as estimated earlier.
Time to allow wheat, sugar exports: Farm Min
India should allow limited exports of wheat, rice and sugar to benefit from high global prices, Farm Minister Sharad Pawar said, as long as domestic consumption is catered for.
However, government sources mentioned that a decision on whether to allow 500,000 tonnes of unrestricted sugar exports under the Open General Licence (OGL) scheme could take another three weeks.
India, the world's biggest sugar producer behind Brazil, had allowed on the OGL sales -- in December, but spiraling domestic food inflation put pressure on the government, which referred the issue to a panel of ministers.
Domestic Production
The Indian Sugar Mills Association (Isma) had revised the country’s sugar production downward to 25 million tonnes (mt) for the 2010-11 season against 25.5 million tonnes estimated earlier due to lower recovery rates in Uttar Pradesh.
According to ISMA, Sugar output in Uttar Pradesh is lowered to 6.4 mt from 7 mt due to late rains, while in Maharashtra, the country’s biggest sugar producer; it is kept unchanged at 9.4 million tonnes. Domestic consumption for 2010-11 is projected at around 22 million tonnes.
The global sugar market is expected to move into a 5.6 million tonne surplus in 2011-12 (April-March) after a deficit of 0.1 million tonnes a year earlier, the Kingsman consultancy said on Sunday in the 7th Dubai Sugar conference 2011 which would end today.
Global sugar stocks-to-use is estimated at around 10 percent, a director of London-based trade house Czarnikow, told the Kingsman sugar conference in an address on Sunday.
Brazilian sugar exports are expected to rise to 23.8 million tonnes in 2011-12, up 700,000 tonnes from a year earlier
Outlook
Sugar prices in the intraday are expected to recover as the farm minister has given a positive statement with repect to Sugar exports.
Overall sentiments in the medium term would depend on the permissible Sugar exports by India. Prices are expected to trade in the range of Rs. 2750 – Rs. 2900 per qtl levels.

(Source: http://www.commodityonline.com/futures-trading/technical/Sugar-rises-on-fresh-buying-22140.html)