Raw sugar futures settled higher Tuesday on modest investor short-covering as players eyed expiration of the March contract by the end of the week, brokers said. The key May sugar contract gained 0.14 cent to close at 13.13 cents per lb. Dealing from 12.93 to 13.22 cents.
Volume traded in the May contract reached 28,288 lots at 1:50 pm EST (1850 GMT). Spot March sugar added 0.15 cent to end at 12.83 cents. Sterling Smith, analyst for brokers FuturesOne in Chicago, said sweetener is getting support from expectations of Indian imports in the months ahead. Analysts said most of the running in the market was position rolling out of front March, which expires Friday.
Open interest in March stood 17,148 lots lower at 40,313 lots as of February 23. Dealers believe actual open interest by Tuesday's close was down to around 30,000 to 35,000 lots. "At this rate, the delivery should be 3,000 to 7,000 lots," one said. In industry news, India's farm minister Sharad Paid the country expects to produce 16.5 million tonnes of sugar in the current crop year and may import 2.0 million tonnes of raw sugar.
Merchant ED & F Man said the global sugar deficit in 2008-09 may be smaller than many analysts believe with output in top producer Brazil set to rise as mills use less cane for ethanol. The International Sugar Organisation raised its 2008-09 global sugar deficit forecast to 4.3 million tonnes from a previous shortfall of 3.6 million tonnes. Volume traded Monday in the No 11 sugar market hit 58,131 lots - exchange data.
Open interest for No 11 sugar market at 638,454 lots as of February 23, from the prior tally of 649,886 contracts. The domestic No 14 May sugar contract was down 0.22 cent at 19.70 cents per lb by 2:08 pm volume on Monday in the No 14 market amounted to 21 lots - exchange data.
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