Fundamental Analysis Indian sugar futures fell for a fourth day on Friday on news of the first major import deal of Sugar in two years and expectations of further overseas purchases from Brazil and Thailand in the coming months.
Raw Sugar imports may rise in the coming months since Sugar mills may not have enough Sugarcane to start crushing in the new season.
Also, higher quota may further pressurize the prices in the short term. In all, centre has released 52 lt of sugar Quota (FSQ + Buffer) for sale in the open market during October-December.
In the medium term, despite huge stockpile of sugar, the global supply outlook will tighten into next year due to rain-induced crop problems in Brazil and falling output in India.
Technical Analysis
Sugar prices (NCDEX Nov 08 Contract) close at Rs. 1750 per quintal on Friday, much lower as compared with 1770 close during the previous day.
Prices closed below its 5 Days, 20 days SMA and 65 days SMA indicating a sideways to downtrend. RSI at 38.58 and is sideways.
Sugar futures are likely to remain sideways to down for the intraday.
OutlookSugar prices are likely to remain weak in the short term due top huge supply pressure in the coming days. Expectations on lower Sugar production by almost 20% due to decline in sowing (17% lower) may further support the prices in the short term. Overall outlook in medium term (November) in Sugar looks are positive on expectations of increased demand for cane-based ethanol, reduced availability of sugar, tightening sugar supplies and increasing demand for the sweetener, from fast-growing emerging economies.
Courtesy: Angel Commodities
