India: Sugar settles down on ample supply

Spot prices of sugar settled 0.19% lower owing to better supplies in the domestic mandis while Futures continued to trade higher and settled 0.22% higher on Monday. Reports of elimination of import duty on sugar till June 30, 2011 also weighed on the sugar prices.
Approval of first tranche of unrestricted Sugar exports also helped prices to gain in the last week.
LIFFE White Sugar Futures fell by $11.40 and settled $615.10 tonne and hit 6 month low of $605/tonne on account of improved supplies in the market. ICE Raw sugar Futures settled 1.7% lower at 21.87 cents on Monday. Prices declined on account of crushing of sugarcane in full swing in Brazil, the largest sugar producer in the world.
India releases 1.75 mln T non -levy sugar for May
India has made available 17.5 lakh tonnes of non-levy sugar for May, higher than 17 lakh tonnes it had released for April, the government said in a statement on Friday.
The quota includes 2 lakh tonnes unsold stocks of April. Besides this, it has also released 2.13 lakh tonnes of levy sugar for May.
India approves first tranche open sugar exports India has approved around 30,000 tonnes of unrestricted sugar exports, kicking off overseas sales of a total 500,000 tonnes given an official green light on April 19, government sources said on Thursday.
A total of 16 mills have been allowed, for about 30,000 tonnes. The government had asked mills to register starting April 19 for exports. It asked mills to ship out the sweetener within four and half months.
Domestic Pricing, Production & Consumption

India has raised the price sugar mills must pay to purchase cane from farmers to 145 rupees ($3.20) per 100 kilograms in the next season that begins from Oct. 1, government sources said during the last week. In the current season to September, the cane purchase price had been fixed at 139.12 rupees per 100 kgs.
As on 20th April, 2011, mills in UP has crushed 643.13 lakh tonnes of Sugarcane and has produced 58.75 lakh tonnes of Sugar with an average recovery rate of 9.14%. UP state government had targeted 65 lakh tonnes.
Thus, government’s target of 24.5 million tonnes may not be achieved as UP itself is going to produce 6.25 lakh tonnes less than what was targeted initially.
Brazil will boost sugar production to 34.6 million metric tons this year from 33.5 million tons a year earlier, according to Unica, an industry group. Thailand’s output for the season that began Oct. 1 may reach an all-time high.
Outlook
Despite of release of higher Sugar quota for the month of May, Sugar prices would continue to rise in the coming weeks due to summer season demand. Prices may gain by Rs. 100-150 per qtl.
In the medium term prices would depend on the further permissible Sugar exports by India and the final estimates of Sugar output. Prices are expected to trade in the range of Rs. 2650– Rs. 2850 per qtl levels.
From long term perspective, prices are expected to take cues from the supplies from Brazil and demand from China as the country is expected to increase its sugar imports in the second half of the year.
Courtesy: Angel Commodities

(Source: http://www.commodityonline.com/futures-trading/technical/Sugar-settles-down-on-ample-supply-23511.html)