Indian soyaoil up; sugar falls

Indian soyaoil futures rose on Monday in line with overseas markets and on lower estimates of domestic oilseed output. Sugar fell after the government failed to announce details of proposed transport, freight and other subsidies for mills that try to tap export markets despite lower global prices.
April soyaoil futures on the Multi Commodity Exchange were up 5.45 rupees at 473.80 per 10 kg, while May futures (MRLK7) had risen 4.55 rupees to 476.80. "Soya is up as prices of crude palm oil is high in global markets where demand remains buoyant from the biodiesel sector," an analyst with a Mumbai-based brokerage said.
Palm and soy compete in the same export markets. India, the world's leading buyer, purchases palm oil from Indonesia and Malaysia and soy oil from South America.
India's oilseed output in the year ending October 2007 is expected to fall to 22.6 million tonnes from 23.9 million tonnes a year ago on lower acreage, the Central Organisation of Oil Industry and Trade said last month. The analyst said sugar fell, as the government did not come up with details of possible incentives to compensate mills.
Farm Minister Shared Pawar last week said the government had approved the measures, and had referred the package to the Election Commission for approval because of polls in some states. The government cannot announce relief packages when elections are round the corner. The key sugar producing state of Uttar Pradesh begins elections this month.
The April sugar futures on the National Commodity and Derivatives Exchange were down 4 rupees at 1,456 rupees per 100 kg. Traders believe sugar exports will reach 2-3 million tonnes in the current crop year to September 2007 provided the government gives incentives to make up for lower world prices.
Sugar output in India, the world's second-largest producer, is likely to touch a record 24 million tonnes in the year that ends in September against about 19 million tonnes last year. The government also plans to build sugar buffer stocks due to the likely surplus. India consumes about 19 million tonne sugar annually.