Indian sugar futures fell on Monday taking their cue from physical sales by mills offloading July's open sale quota, and with sentiment weighed down by expectations of another bumper crop, analysts said.
At 2:15 pm (0845GMT), the August contract on the National Commodity and Derivatives Exchange was down 0.46 percent at 1,291 rupees and the September contract was trading at 1,315 rupees, down 0.3 percent.
At the end of last week about 300,000 tonnes of sugar allocated under the July quota were still with millers, who were actively selling, said Amol Tiles, an analyst with Motional Oswal Commodities Broker Pvt Ltd. The government allowed sales in open markets of about 1.3 million tonnes of sugar in July. The authorities at lower prices for welfare programmes will buy unsold quantities.
An increase in sugarcane acreage also hit prices, analysts said. The area under the new crop has increased to 5.12 million hectares from 4.83 million ha, according to government data released on Friday. Crushing will start in October.
India is likely to produce a record 28.5 million tonnes of sugar in the year to September, sharply up from a year ago. An analyst with IL&FS Investsmart Commodities Ltd said the higher acreage and favourable weather were likely to produce yet another record output in 2007/08.
Comments
Comments are closed.