Moneycontrol
Jan 11, 2017 01:37 PM IST | Source: Moneycontrol.com

Expect Sugar prices to trade higher: Angel Commodities

According to Angel Commodities, expect sugar prices to trade higher on good physical demand from the industrial buyers and stockists as sugar production in Maharashtra may drop by 40%.


Angel Commodities report on Sugar


Sugar Futures closed flat on Tuesday as government is still hoping that the sugar stock will be sufficient for domestic consumption and so there is no plan to cut import duty. However, the prices have not declined much on reports that the sugar output may be lower than expected in the country. India's sugar production in 2016/17 is likely to fall to 22 mt, down 4.3% from an earlier estimate, as mills in its key producing state are closing early due to a cane shortage, as two years back-to-back droughts.


As per sugar body, more than two dozen mills in India's top sugar producing western state of Maharashtra have stopped crushing due to cane shortage while many more mills are likely to shut before February end.


Outlook

We expect sugar prices to trade higher on good physical demand from the industrial buyers and stockists as sugar production in Maharashtra may drop by 40%. There is an anticipation of cane scarcity in Maharashtra and higher sugarcane prices in UP may keep the supply lower at higher prices.

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