Sugar Spot prices and Futures witnessed mixed trades throughout the week. Prices in the Spot markets settled 1.31% higher w-w. Decision regarding exports is controlling prices from falling sharply. Decision of further exports of sugar is expected to be taken on February 7, 2012. 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. The government has released lower monthly quota for the month of January at 17.16 lakh tonnes which includes 2.16 lakh tonnes of levy quota and 15 lakh tonnes of non levy quota.
According to the Food Minister, Ministry is planning to discuss with States, the Finance and Agriculture Ministries on removing some of the controls such as doing away with the mandatory obligation to offer sugar for the public distribution system (PDS) in the New Year(Source: Hindu Business Line.
Liffe and ICE Raw Sugar prices jumped sharply to touch 2 month high on talks of a possible late start to the harvest of Brazil’s main centre south cane crop. Also investors eyed news on progress of Greece debt. Prices settled 0.62% and 1.14% higher on Friday.
Domestic Sugar updates
Maharashtra, the country's largest sugar producer, crushed 34.6 mln tn cane during Oct 1-Jan 15 against 31.5 mln tn a year ago, ISMA said. Sugar recovery in the state was also higher during the period at 10.71% versus 10.25% a year ago.
Uttar Pradesh, India's largest cane producer, crushed 34.7 mln tn cane during the period under review, 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 Indian Sugarcane production is estimated higher by 0.9% at 342 mn tn for 2011-12 season starting October 1, 2011. ISMA has projected sugar production at 26 million tonnes for 2011-12.
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
Thailand has crushed 9.4 mn tn cane this season against 3.3 mn tn a year ago. Thailand sugar output could reach to 9.9 million tonnes in 2011-12 compared to 9.64 million tonnes in 2010-11.
According to UNICA, Sugar output in Brazil's center-south from the start of the season to January 01,2012 stood at 31.2 million tonnes down 7% for this time a year ago. Total 2011-12 crush of sugar stood at 492.23 million tonnes down 11% from a year earlier.
Swiss sugar consultancy Kingsman lowered its global 2011-12 sugar surplus estimate by 940,000 tn to 8.22 mln tn.
Outlook
Sugar prices are expected to trade sideways on account of lackluster trades in the domestic market. However, any decision related to further exports of sugar apart from 1mn tn already approved is likely to provide support to the prices.
From long term perspective, prices are expected to take cues from the Sugar output estimates in the domestic market, change in government policies with respect to exports and International Sugar prices, which would be influenced by the supplies from Brazil, Thailand and India and demand from China.
Courtesy: Angel Commodities
Looking for Trading Advisories? Visit tips.commodityonline.com
