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Indian sugar futures down; still awaits triggers

Source : REUTERS
Last Updated: Fri, Feb 22, 2013 13:24 hrs

NEW DELHI, Feb 22 (Reuters) - Indian sugar futures were down on Friday on weak demand from bulk consumers, while spot prices were slightly up, though the market still awaits triggers in the form of any government moves to lift curbs on the highly controlled sugar sector.

* As of 0830 GMT, the key April sugar contract on India's National Commodity and Derivatives Exchange was 1.4 percent down at 3,153 rupees ($58) per 100 kg. The contract moved in the 3,139-3,205 rupees range during the session.

* "Prices are expected to be range-bound with a downward bias until the government announces steps for decontrol of the sugar sector," said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.

* 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.

* An advisory panel headed by economist C. Rangarajan last year recommended freeing the sugar sector from a host of government controls.

* Spot sugar stabilised during the week after the impact of talks of an expected rise in production tax, as hinted by India's Farm Minister Sharad Pawar earlier in the week, receded.

* "Any decision on the production tax before the budget can push prices up," said a Mumbai-based analyst.

* India's Finance Minister P. Chidambaram will present the federal budget for 2013/14 fiscal year starting April 1 later in the month.

* Spot sugar up 11 rupees at 3,218 rupees per 100 kg in the Kolhapur market in top-producing Maharashtra state.

* "Spot prices are more or less stable as there is no major movement in the market in the absence of any trigger," said Kuvadia.

* 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.

* On Thursday, New York raw futures fell 1.3 percent at 18.12 cents per lb, after hitting 17.87 cents a week earlier, its lowest level since August 2010. It fell on heavy dealings as a stronger dollar and swelling global supplies led investors to sell futures.

* London May white sugar eased 0.6 percent to end at $498 a tonne. [$1 = 54.495 rupees] (Reporting by Ratnajyoti Dutta; Editing by G.Ram Mohan)




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