Indian sugar hits 1-1/2 year low on mounting supplies
Category: Sugar
(Reuters) – Indian sugar futures dropped on Tuesday to their lowest level in nearly one-and-a-half years, hurt by mounting supplies and softening demand from bulk consumers due to the winter season.
The key December contract was down 0.39 percent at 2,808 rupees ($45.29) per 100 kg on the National Commodity and Derivatives Exchange at 0854 GMT. It fell to 2,801 rupees earlier in the day, its lowest since June 8, 2012.
“Carry forward stocks are higher and cane crushing in the new season would increase the inventory. The demand is weak,” said Chowda Reddy, a senior analyst at Inditrade Derivatives and Commodities.
India started the new sugar marketing year 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.
Demand for the sweetener from bulk consumers like ice-cream and cold drink makers usually drops during winter.
Spot sugar edged down 5 rupees to 2,882 rupees per 100 kg at the Kolhapur market in Maharashtra.
Sugar cane crushing normally starts in the first week of November in Maharashtra and Uttar Pradesh, the country’s top two producing states, but this year it has been delayed as farmers and mills could not reach an agreement over the cane price.
The dispute over sugarcane prices between farmers and mills may curb sugar exports from the world’s second-biggest producer, delay crushing in the new season and even trigger bankruptcies. ($1 = 62 Indian rupees)
