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Indian sugar falls on poor festival demand, ample supply

Source : REUTERS
Last Updated: Thu, Oct 31, 2013 10:21 hrs

NEW DELHI, Oct 31 (Reuters) - Indian sugar futures fell on Thursday due to poor festival demand and more than ample supplies from mills which are under pressure to sell to cut down inventories.

* The key December contract was down 0.18 percent at 2,847 rupees ($46.45) per 100 kg on the National Commodity and Derivatives Exchange at 0945 GMT.

* "Festival demand has failed to pick up due to overall high inflation and there is a lot of selling pressure from mills struggling with huge stocks," said Mukesh Kuvadia, secretary general of the Bombay Sugar Merchants Association.

* Constrained by large unsold stocks and lower prices, mills in Uttar Pradesh, India's second biggest sugar producer, have not been able to pay cane farmers and now owe them around 24 billion rupees.

* India will celebrate the Hindu festival of Diwali in the first week of November. Sugar demand from bulk consumers usually rises ahead of Diwali.

* India started the new sugar marketing year with carry-forward stocks of 8.8 million tonnes. It is expected to produce 25 million tonnes this year against a demand of 23 million tonnes.

* Spot sugar rose 11.10 rupees to 3,250 rupees per 100 kg at the Kolhapur market in the top-producing Maharashtra state.

* A pickup in exports could help mills in trimming inventory and support prices, dealers said.

* Indian traders have struck deals to export about 175,000 tonnes of raw sugar for December-January delivery, marking their first sale in the new season that started on Oct. 1.

* A dispute over sugar cane prices between Indian farmers and mills may curb sugar exports from the world's second-biggest producer, delay crushing in the new season and even trigger bankruptcies. ($1 = 61.29 rupees) (Reporting by Mayank Bhardwaj; Editing by Anupama Dwivedi)



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