India sugar drops on weak demand, lack of exports

India sugar drops on weak demand, lack of exports

Last Updated: Mon, Jan 28, 2013 12:00 hrs

NEW DELHI, Jan 28 (Reuters) - Indian sugar futures fell on Monday due to weak demand, mounting supplies from mills and poor export prospects due to lower world prices.

* Mills in India are expected to churn out 24.3 million tonnes of sugar in 2012/13, a leading industry body last week said, marginally raising its previous forecast.

* An output of more than 24 million tonnes will be lower than the 26 million tonnes produced in the previous year, but higher than the expected local consumption of about 22 million tonnes.

* India's sugar output rose 3 percent to 10.8 million tonnes in the first three-and-a-half months of the season beginning October.

* India's export volumes have been too tiny in the season beginning October due to lower global prices but imports have surged in a surplus year.

* India has contracted to import 920,000 tonnes of raw sugar since the season began in October, turning into a net importer for the first time in two years despite surplus stocks at home, a senior industry official said.

* As of 1124 GMT, the key February sugar contract on India's National Commodity and Derivatives Exchange was down 0.13 percent at 3,191 rupees ($59.19) per 100 kg.

* Sugar edged down to 3,250 rupees per 100 kg from 3,251.35 in the Kolhapur spot market in the top-producing Maharashtra state.

* "Bulk buyers are not stocking up since they know that there's plenty of sugar in the market and that's the main reason behind poor demand," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.

* Demand for the sweetener from bulk consumers like cool drink and ice cream makers usually drops in India during winter. (Reporting by Mayank Bhardwaj; Editing by G.Ram Mohan)

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