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India Sugar:Falls in most mkts as ISMA raises ’19-20 output estimate

Tuesday, Feb 25

 

By Preeti Bhagat

 

NEW DELHI – Prices of medium-grade sugar fell in most key wholesale markets of the country today after Indian Sugar Mills Association raised its output estimate for 2019-20 (Oct-Sep) to 26.5 mln tn from 26.0 mln tn pegged earlier.

 

The estimate is after diversion of B-heavy molasses and 100% cane juice to ethanol, the association said.

 

In Delhi and Mumbai, prices fell by 20 rupees per 100 kg and 10 rupees, respectively. In Muzaffarnagar, it was down 15 rupees each.
 

The sugar body pegged the closing stock for the ongoing season lower at about 10 mln tn. The ending stock for the previous season was 14.6 mln tn.

 

Prices were also down because of weak demand from bulk buyers and selling pressure ahead of month-end, they said.

 

"Sugar from Maharashtra and Karnataka is not finding buyers in other states… monthly quota of some mills in February will also lapse," an official with a leading mill in Mumbai said.

 

In a bid to boost exports and help mills reduce the glut in the market, the government today again extended the deadline for sugar mills that had partially met their Minimum Indicative Export Quota for 2018-19 (Oct-Sep) to ship leftover stocks of the sweetener to Mar 14.

 

The government had last extended the deadline on Feb 12 for three days.

 

On Monday, the government also re-allocated 611,797 tn from the sugar-export quota to mills that signed contracts for at least 75% of their quota by Dec 31. This quantity is 20% from the export quota of mills that did not commit even 25% of their quota by Dec 31.

 

Reallocation would help India achieve the 6-mln-tn export target for 2019-20 season.

 

The most-active May raw sugar contract on the Intercontinental Exchange Futures US was at 14.72 cents per pound, down 0.1% from the previous close. Prices also hit a one-week low of 14.67 cents today because of selling pressure from speculators and technically driven Funds.

 

"With worldwide equities, energy and commodities markets taking another hit following the reported spread of the coronavirus, it seemed inevitable that the bullish sugar fundamentals should take a back seat for a while. Growth forecasts worldwide are being downgraded, and basket trading is taking hold," Sucden Financial said in a report.

 

Following are today's ex-mill prices of medium-grade sugar in rupees per 100 kg, at key wholesale markets, and the change from the previous close:

 

MARKETPRICECHANGE
Delhi3,410(-)20
Mumbai3,633(-)10
Muzaffarnagar3,488(-)15
Kolhapur3,3610

 

End

 

Edited by Maheswaran Parameswaran

 

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