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India sugar steady as bargain buying offsets supply
May 30, 2012 / 12:31 PM / 6 years ago

India sugar steady as bargain buying offsets supply

MUMBAI, May 30 (Reuters) - Indian sugar futures ended steady on Wednesday as bargain buying negated downward pressure due to ample supplies and weak demand from local and overseas buyers.

* The world’s top producer after Brazil is estimated to produce 26 million tonnes of sugar in 2011/12, higher than the annual domestic demand of about 22 million tonnes.

* To ease the stocks, India has allowed unrestricted exports but the move failed to cheer the market as prices have fallen sharply overseas.

* The key June sugar contract on the National Commodity and Derivatives Exchange ended down 0.07 percent at 2,816 rupees ($50.08) per 100 kg.

The contract fell to 2,805 rupees on Tuesday, the lowest level for front-month contract since April 20.

* “Supplies are more than demand. Bulk buyers are not active. Exports are not picking up. All these factors are putting pressure on prices,” said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.

* Demand for sugar from ice-cream and beverage makers typically rises during the summer. However, unseasonal rains and a lower-than-average temperature have crimped demand compared with the previous year, dealers say.

* With the onset of the monsoon rains, expected to hit the southern coast on June 1, the demand for the sweetener is likely to fall further.

* Sugar price was steady at 2,825 rupees in the spot market in Kolhapur, in top producing western Indian Maharashtra state.

* New York raw sugar futures inched lower to levels still above the 21-month low touched a week ago as a firmer dollar weighed on dollar-denominated commodities by making them more expensive in terms of other currencies.

$1 = 56.23 Indian rupees Reporting by Rajendra Jadhav; editing by Malini Menon

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