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India Sugar:Falls in north on undercutting by mills; 3-wk low on ICE

Wednesday, Feb 26

 

By Preeti Bhagat

 

NEW DELHI – Prices of medium-grade sugar fell today in the key wholesale markets of north India for the third straight day as mills sold stocks at lower rates to exhaust their monthly quota, traders said.

 

In Delhi, prices fell by 40 rupees per 100 kg and in Muzaffarnagar, it was down 20 rupees.

 

Market participants expect higher monthly sales quota for March at 2.2 mln tn because of the onset of summer.

 

Prices also fell because of limited demand as most people stocked up in January despite higher prices, a market expert said.

 

"Trade was very bullish in January and quota was high, still people were buying. Around 2 mln tn was bought at higher prices last month and consumption was not much, so now that stock is being used," the expert said.

 

Prices are also under pressure as market has come to realise that mills in Maharashtra will run longer than earlier expectations and will produce more sugar. Production of sugar in the second largest producer is now seen at 6.2 mln tn, against earlier estimates of 5.5-5.8 mln tn.

 

Prices were unavailable in Mumbai today as markets were shut on account of a workers' strike.

 

In Kolhapur, prices were steady due to lack of fresh cues. 

 

The most active May raw sugar contract on the Intercontinental Exchange Futures US hit a three-week low of 14.46 cents per pound as more cane is likely to be diverted to produce the sweetener in centre-south Brazil in 2020-21 (Apr-Mar), analysts said.

 

The mix in the centre-south region is likely to rise to over 37% from 35% this season due to remunerative prices of sugar.

 

"The market opened weakly this morning… The world seems to be growing increasingly concerned to the threat of a global flu pandemic and the possibility of a deep economic recession," Sucden Financial said in a report.

 

The May contract was down 1.9% from the previous close at 14.46 cents.

 

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
Delhi3,370(-)40
Mumbai3,633
Muzaffarnagar3,468(-)20
Kolhapur3,3610

 

End

 

Edited by Nidhi Chugh

 

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This copy was first published on the Cogencis WorkStation

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