Sugar Futures Fall in Intra-Day Trade India

Sugar futures have fallen sharply in intra-day trade India as news on sugar imports from Pakistan and government measures to ensure sufficient supplies during festive season dampened market sentiments.

At National Commodity and Derivatives Exchange (NCDEX) Sugar Nov contract was down 0.45% at Rs 3310 per 100 kg while Oct contract is down by 1% at Rs 3373. NCDEX Sugar Nov is trading below 20, 50 day moving average with support at 3250, 3200 levels while resistance is seen at 3340, 3400 levels, according to Sreekumar Raghavan, Chief Commodity Strategist at Commodity Online.

The near term trend appears sideways to bearish with festival demand to provide firm support, he added. Indian mills have already signed deals to buy up to 450,000 tons of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens. India is importing sugar for the first time in more than two years.

The freight-on-board (FOB) price of $545 per ton has been attractive enough for the traders who have contracted to buy sugar from Pakistan as they stand to gain $15-$20 a ton after paying a duty of 10%, according to sources. India levies a 10% tax on sugar imports. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tons in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tons. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12.

India, the world's top consumer and the second largest producer of sugar to import about 5,000 tons of white sugar from Pakistan. Indian traders have signed a deal with Pakistan regarding the import, according to trade sources. The area under sugarcane in India is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year.Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13.