Indian sugar drops to one-week low on sluggish demand

29 May, 2013

Indian sugar futures fell on Tuesday to their lowest level in a week due to lower-than-expected demand from bulk consumers and rising imports, though concerns over output in the next season limited the downside. The key June contract on the National Commodity and Derivatives Exchange was down 0.56 percent at 3,003 rupees per 100 kg at 0816 GMT, after falling to 3,000 rupees earlier, the lowest level since May 20.
"Cold drink makers are buying, but less than usual. We had been expecting strong demand from bulk consumers," said Ashok Jain, president of the Bombay Sugar Merchants Association. Demand for sugar from ice cream and beverage makers typically rises during the summer. Concerns that sugar output in top-producing Maharashtra state may fall sharply due to drought also limited the downside, dealers said. Sugar cane is a perennial, water-intensive crop and is usually harvested 10 to 16 months after planting. Cane for the crushing season starting October 1 has been planted, but half the total acreage is short of water.

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