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Indian sugar futures fall due to weak demand, higher supplies

Source : REUTERS
Last Updated: Fri, May 24, 2013 09:30 hrs

NEW DELHI, May 24 (Reuters) - Indian sugar futures fell on Friday, extending losses from the previous session, due to higher supplies and weak demand despite the summer season, which usually helps sugar sales.

* Lower global prices also weighed on the contract. The benchmark July raw sugar contract settled at 16.76 cent a lb on Thursday, hovering around the lowest level for the front month since July 2010.

* The key June contract on the National Commodity and Derivatives Exchange was down 0.65 percent at 3,035 rupees per 100 kg at 0856 GMT.

* "Every one -- right from mills to bulk buyers have higher stocks and supplies are more than plenty," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. "Lower global prices have also dragged down prices," he said.

* Demand for sugar from ice cream and beverage makers typically rises during the summer.

* But there are concerns that sugar output in the top-producing Maharashtra state may fall sharply due to drought.

* Sugar cane is a perennial, water-intensive crop and is usually harvested 10 to 16 months after planting. Cane for the crushing season starting Oct. 1 has been planted, but half the total acreage is short of water.

* Spot sugar dropped 10 rupees to 3,400 rupees per 100 kg at the Kolhapur market in the top-producing Maharashtra state.

* Farmers have planted cane on 4.07 million hectares as of May 17, compared with 4.57 million hectares during the same period a year earlier, agriculture ministry data showed.

* India is likely to produce 24.6 million tonnes of sugar in 2012-13, an industry body has said, against an annual demand of about 23 million tonnes. (Reporting by Mayank Bhardwaj; Editing by Anand Basu)




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