According to Angel Commodities, Sugar Futures gain for the second consecutive day on Wednesday due to expectation of better summer demand from the industrial buyers and probability of lower production.
Angel Commodities' commodity report on Sugar
Sugar Futures gain for the second consecutive day on Wednesday due to expectation of better summer demand from the industrial buyers and probability of lower production. The government is likely to re vise 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 lowering 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 short er seasons in Maharashtra after two consecutive droughts and has produced only 41. 6 lakh tonne sugar so far compared to 83.75 lt of sugar as on 30t h April 2016. Raw sugar futures on ICE closed little higher and traded in a narrow range and hovered above last week's three - month low for the third straight session. Societe Generale in a report increased its estimate for a global 2016 - 17 sugar deficit to 3.8 mt from 2.4 mt and cut its global 2017 - 18 surplus forecast to 5 mt from 5.9 mt.
We expect sugar prices to trade higher due to lower production estimated this season and anticipation of higher sugar demand during summer from industrial buyers. Moreover, sufficient supplies in the near term as sugar mills continue to sell sugar may cap rise in prices.
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