Sugar prices gained sharply in the early part of the session by more than 1.5% on release of lower monthly quota for the month of December.
However, prices declined and settled marginally higher on reports 17% higher output during the Oct-Jan 2011-12 season.
According to ISMA, India produced 13.28 mn tn of Sugar in the first four month of the season that started in October 2011.
Government on 1st February 2012 approved sale of 14 lakh tn total non levy Sugar for the month of February including 1.5 lakh tn unsold quota of January 212. Total quota for the month of February stands at 16.1 lakh tn including 2.1 lakh tn of levy quota.
The Sugar directorate has issued release orders for exports of 700352 tn Sugar so far for the season started Oct 01.
India produced 10.45 mln tn sugar in the first three-and-a-half months of the season that began Oct 1, 19% higher than 8.77 mln tn a year ago.
Lower year-on-year sugar production reported by top producer Brazil did little to stem selling the futures market. March delivery declined slightly, by 0.2% to 23.59c a pound or $ 524 per tn, the lowest front-month settlement in nearly three weeks.
Domestic Sugar updates
According to ISMA, Maharashtra, the country's largest sugar producer, is likely to produce 9 mn tn sugar in 2011-12 season, followed by UP at 6.8 mn tn and Karnataka at 3.8 mn tn.
Uttar Pradesh, India's largest cane producer, crushed 34.7 mln tn cane during the period Oct- 01 to 23rd Jan 2012 compared with 27.1 mln tn a year ago, it said. Though the quantum of cane crushing was higher, recovery was lower at 8.49% compared with 8.85% a year ago as crushing began early With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 32 mn tn against the domestic consumption of around 23 mln tn. Thus there is a wide scope for exports from India.
Global Sugar Updates
The global sugar surplus is forecast to more than halve into next season from forecast of 7.9 mn tn in 2011-12 to 3.2 mn tn in 2012-13 season, according to Reuters Poll.
The sugar-cane crush in main center-south producing region of top grower Brazil totaled 492.7 million metric tons in the 2011-12 season that started April 1 to Jan. 16, down 11.4% on the year, sugar-cane industry association Unica said on Thursday.
No dramatic turnaround in the Brazilian crop is expected in 2012-12 as the fall in production last year was due mainly to an ageing cane crop which would continue this year. The impact of the weather phenomenon La Nina was a key variable, potentially affecting sugar supply. La Nina would exacerbate the dryness in the centre-south of Brazil, delaying crop maturation and crushing.
Courtesy: Angel Commodities
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