According to Angel Commodities, expect sugar prices to trade sideways to lower on sufficient supplies in the near term as sugar mills continue to sell sugar to control domestic prices.
Angel Commodities' report on Sugar
Sugar Futures closed flat on Monday due to lower spot demand and good supplies from mills. Market participants are expecting better summer demand from the industrial buyers as there is probability of lower production this season.
Moreover, government is likely to revise down its estimate on sugar output in 2016-17 (Oct-Sep) from 22.5 mt forecast earlier due to shortage of cane in Maharashtra and Karnataka. Recently, ISMA lowered the production estimate by about 10 lakh tonnes (lt) for 2016/17.
Moreover, Maharashtra’s cane crushing season of 2016- 17 has come to an end. This is among the shorter seasons in Maharashtra after two consecutive droughts and has produced only 41.6 lt sugar so far compared to 83.75 lt of sugar as on 30th April 2016.
We expect sugar prices to trade sideways to lower on sufficient supplies in the near term as sugar mills continue to sell sugar to control domestic prices. However, due to lower production estimated this season and anticipation of higher sugar demand during summer the price may improve.
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