Sugar futures still sweet
Naka prices were unchanged despite increasing pressure from mills. Mill tender rates improved by Rs 10 for fine quality sugar. As traders expect higher demand in the coming days, the sentiment continues to be positive. Producers are also not eager to sell large quantities as the futures markets are tracking a firm uptrend. Sugar prices in domestic futures market was up by more than Rs 25-50 till noon. Volumes were routine.
The spokesman for B. Bhogilal and Co said that the rising pressures on 15th July due has kept stockists away from fresh bulk buying despite the firm futures markets. July futures contract was up by Rs 50 till noon as its expiry is nearer while August-September contracts were higher by Rs 25. Millers and traders are expecting higher physical festival demand in August - September, hence the strong sentiment continues at upper levels, supporting spot and naka prices.
The monsoon is also cause for concern. Maharashtra, India's largest sugar-producing State, has had very low rainfall, which could hit yields. Rains have so far been 23 per cent below average nationwide.World sugar prices also went up sharply in the last one month, crossing the $650 mark. According to brokers, a 13 per cent rally in raw sugar futures in New York over the past month is likely to dent demand as buyers opt to wait for lower prices before stepping up purchases.
Sugar climbed as rains in May and June delayed the harvest and shipments from Brazil, the world's largest producer. Sweetener output in centre south, the country's main growing area, fell 28 per cent to about 49 lakh tonnes through June 15, according to data from industry group Unica.