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India sugar hits 3-week low on supply surplus; eyes exports
August 27, 2013 / 9:43 AM / 4 years ago

India sugar hits 3-week low on supply surplus; eyes exports

MUMBAI, Aug 27 (Reuters) - Indian sugar futures dropped on Tuesday to their lowest level in three weeks on weak demand and ample supplies due to surplus production in three straight years, although hopes that a weak rupee will revive exports limited the downside.

* At 0930 GMT, the key September contract was down 0.36 percent at 3,005 rupees ($45.74) per 100 kg on the National Commodity and Derivatives Exchange. It fell to 3,001 rupees earlier in the day, the lowest level since Aug. 6.

* “To offset supply surplus the market needs substantial demand, export orders. Right now the market is over supplied,” said Badruddin Khan, associate vice president of research at Indiabulls Commodities.

* Sugar output in India, the world’s biggest consumer, is expected to exceed the current year’s 25 million tonnes in the marketing year beginning October, on the back of good monsoon rains.

* Maharashtra and Uttar Pradesh, the top two sugar producers in India, have received more-than-normal rainfall since the beginning of the monsoon on June 1, weather department data showed, boosting prospects of higher production.

* Spot sugar was down 5 rupees at 3,039 rupees per 100 kg at the Kolhapur market in Maharashtra state.

* A weak rupee increases the returns of sugar exporters. The Indian rupee hit a record low on Tuesday. ($1 = 65.7 Indian rupees) (Reporting by Rajendra Jadhav; Editing by Supriya Kurane)

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