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Indian sugar futures drop as crushing gathers momentum

Source : REUTERS
Last Updated: Thu, Jan 02, 2014 09:30 hrs

NEW DELHI, Jan 2 (Reuters) - Indian sugar futures fell on Thursday as cane crushing in the top three sugar producing states gathered momentum, swelling supplies and bumping up stocks at mills' warehouses.

* At 0905 GMT, the key January contract was down 0.18 percent at 2,815 rupees ($45.51) per 100 kg on the National Commodity and Derivatives Exchange.

* "Crushing is in full swing now and supplies have picked up, adding to the woes of mills struggling to sell sugar when there are plenty of stocks all around," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.

* Indian sugar mills produced 5.74 million tonnes of the sweetener between Oct. 1 and Dec. 30, about 29 percent lower year-on-year. Between Oct. 1 and Dec. 15, output was down 50 percent.

* Spot sugar was down 39.10 rupees per 100 kg to 3,090.00 rupees per 100 kg at the Kolhapur market in Maharashtra.

* India started the new sugar marketing year on Oct. 1 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.

* Worried over slumping prices, rising stocks and mills' inability to pay cane growers, the government last month approved a $1.0-$1.1 billion loan to mills to help pay government-set prices to cane growers.

* The government now looks likely to give some more incentives to mills to produce raw sugar that can be sold on the global market. ($1 = 61.85 rupees) (Reporting by Mayank Bhardwaj; Editing by Sunil Nair)




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