Expect sugar to trade sideways to higher: Angel Commodities

Angel Commodities report on Agri CommoditiesSugarSugar Futures on NCDEX recovered after two days of fall taking clues from International markets. However, reports of higher production from mills and slowdown in exports from the country capped further gains. Sugar Mar futures closed 0.36% higher to settle at Rs. 3,085/quintal. However, spot sugar slipped down on over supply. ISMA in its press release estimated sugar output at 17.34 mt as on February 15, 2016 compared to 16.72 mt in the corresponding period of last year. Moreover, India has surplus sugar stock because of bumper production in last five years, depressing local prices.According to latest ISMA press release, sugar production is estimated at 26 MT this year, sufficient to meet the domestic requirement. India has exported 0.95 million tonnes of sugar so far in the ongoing 2015-16 marketing year, industry body ISMA today said expressing concerns over slow pace of shipments due to fall in global prices. However, sugar production in India rose by 4.54 % to 14.25 mt in the first four months of the current marketing year.Global UpdatesRaw sugar futures on ICE gain on lower level buying despite bearish fundamentals. Al Khaleej's moved to make a big delivery of white sugar in London against the expiring March white-sugar contract as a sign of weak demand, as exchanges are often regarded as a last-resort buyer for commodity producers. Adding to the bearish sentiment, China, the world's top sugar buyer, imported 25% less of sugar in January from a year earlier, according to the country's customs data released on Sunday Global sugar output will fall for the fourth straight year in 2015-16, with Brazil's crop pegged down at 35 mt.OutlookWe expect sugar to trade sideways to higher on need based buying from traders and stockists as stock levels are higher in the country. Moreover, limited export potential due to lower International prices too pressurizes prices in domestic market.

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