After remaining firm during the last week on account of lower monthly quota, Sugar futures witnessed profit booking on Monday and settled 0.41% lower. Spot continued to remain firm on hopes that government would soon give its decision on sugar decontrol and additional exports.
A meeting of panel of ministers will likely today consider allowing more sugar exports in addition to the one mn tn already permitted.
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.
According to ISMA, India produced 13.28 mn tn of Sugar in the first fourmonth of the season that started in October 2011.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.
Although higher global surplus point towards downward pressure on International sugar prices, Liffe as well as ICE Sugar futures settled 1.7% and 2.3% higher on Monday buoyed by stronger economic data from countries including the United States and Germany.
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
China’s Oct-Jan Sugar output falls 8% to 5.22 mn tn. Chinese sugar output is estimated at 12 mn tn, however, final output may be revised downward due to adverse weather conditions.
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.
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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