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India sugar drops on mounting supplies, weak demand

Source : REUTERS
Last Updated: Wed, Feb 27, 2013 09:50 hrs

NEW DELHI, Feb 27 (Reuters) - Indian sugar futures fell on Wednesday due to mounting supplies from local mills and cheaper imports after demand failed to pick up amid cold weather across North India.

* The key March sugar contract on the National Commodity and Derivatives Exchange fell 0.42 percent to 3,055 rupees ($56.85) per 100 kg, as of 0915 GMT.

* "Other than higher supplies from mills and imports, lower global prices have also been putting downward pressure on sugar," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.

* On Tuesday, New York raw sugar futures settled at 17.79 cents per lb after hitting 17.76 cents a lb, the lowest level for the front month contract since August 2010.

* Indian sugar mills have contracted more than 1 million tonnes of raw sugar imports for the current season, dealers said.

* Spot sugar fell 8 rupees to 3,178 rupees per 100 kg in the Kolhapur market in top-producing Maharashtra state.

* India's sugar output rose 3 percent to 13.8 million tonnes on year in the first four months of the season beginning October 2012.

* "I see some upside only when demand from soft drink and ice cream makers picks up in the summer," Kuvadia said.

* India, the world's second-biggest producer of sugar after Brazil, has been exploring options to free the sector from various controls to avoid cycles of oversupply and shortage.

* The south Asian country is likely to produce 24.3 million tonnes of sugar in the current year ending on Sept. 30, against local demand of about 23 million tonnes. ($1 = 53.7 Indian rupees) (Reporting by Mayank Bhardwaj; Editing by Gopakumar Warrier)




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