Sugar futures in NCDEX ended up for a fourth day on Thursday, bolstered by festival demand and expectations the government would relax a deadline for clearing buffer stocks or monthly free sale quota.
The government, which controls the sector, had told millers to clear the buffer stock by the end of September in addition to the monthly quota. This had boosted supplies for the month to about 2.1 million tonnes. In comparison, the supplies in the same month last year were 1.3 million tonnes.
Spot prices in Maharashtra, the country's largest sugar producer, rose 0.15 percent to 1,703 rupees. Sugar prices in Muzaffarnagar mandi rose by Rs.13 per quintal to trade at Rs.1, 857 per quintal today. Prices increased due to good demand in the local mandi. Moreover, millers are quoting higher prices in view of good demand ahead of festivals. Demand from other states especially, Rajasthan were reported to be good. Arrivals were reported at around 500 to 800 quintals.
India's sugarcane area continues to lag in the major growing areas. The country's summer sown sugarcane area was down 17% on year at 4.41 million hectares according to latest data from the government.
Influencing Factors: Firm physical market
Short covering
Increasing exchange stocks
Festival demand has improved
Possibly trimming supplies
Recovery in global sugar prices
Output drop in key growing regions
Lower production on year to year basis
Stockiest buying
Limited arrivals in Spot market
The ISO forecast a world sugar deficit of 3.90 mln tonnes in 2008/09 compared with a surplus of 7.25 mln in 2007/08 Exports are expected to increase to 30 lakh tonnes compared to about 17 lakh tonnes in the previous year.
Technical Outlook Technically Sugarm200 October closed ABOVE 9 day EMA and 21 day EMA.
Today’s Recommendation NCDEX SugarS200 October buy above 1760 SL below 1752, targets 1768, 1779, 1805
Courtesy: JRG Wealth Management
