India sugar hits 2-week low on sluggish demand, ample supply
Category: Sugar
(Reuters) – Indian sugar futures fell to their lowest level in two weeks on Monday on subdued demand due to cold weather and as the government delayed a decision on giving financial assistance to mills for production of raw sugar.
The key January contract was down 0.43 percent at 2,785 rupees ($44.77) per 100 kg at 0930 GMT on the National Commodity and Derivatives Exchange, after falling to 2,775 rupees earlier in the day, the lowest level since Dec. 24.
“Supplies are rising every day due to ongoing cane crushing, but demand is very weak. Bulk consumers are not buying due to cold weather,” said Ashok Jain, president of the Bombay Sugar Merchants Association.
Temperature has fallen below normal in many parts of the country, the weather department said on Monday.
Demand for sugar from bulk consumers like icecream and cold-drink makers usually drops during the winter.
Spot sugar was down 2 rupees at 2,838 rupees per 100 kg at the Kolhapur market in Maharashtra.
The government was expected announces sops for raw sugar production last week, but has postponed it to Jan. 16, dealers said.
India could soon boost exports of raw sugar at the expense of top suppliers Brazil and Thailand as the government looks likely to give cash-strapped mills financial help for production so they can pay farmers.
India started the new sugar marketing year on Oct. 1 with carry-forward stocks of 8.8 million tonnes. It is expected to produce 25 million tonnes this year against a demand of 23 million tonnes. ($1 = 62.2075 Indian rupees)
