Sugar traders eye sweet returns on festive demand

The ensuing festive season may bring cheer to sugar traders as the festivities might provide the much needed demand boost in the coming weeks.

Sugar prices in the commodity market as well as mandis have shown a lacklustre trend in the recent past due to absence of any major news flow, brokers said.

However, spot traders are still hopeful that the demand would take off as the festive season is approaching, domestic commodity brokerage firm Sharekhan said.

Sugar prices have remained more or less stagnant in Delhi and Muzaffarnagar due to the recent rains. However, prices at the Kolkata market have been marginally higher.

The downslide in sugar futures seems to be a common phenomenon across the global markets. The prices have been on a downward spiral in the US and UK markets as well, where trading range has been very narrow over the recent past.

Michael Davies, a research analyst at London-based commodity brokerage firm Sucden Research said in a report that LIFFE Sugar and CSCE sugar saw a decline and London white sugar futures saw a sharp fall.

The fall was triggered by speculative selling after it failed to breach the resistance levels, which followed an overnight fall in New York raw sugar prices.

Union Agriculture Minister Sharad Pawar expects a higher sugar output of about 220 lakh tonnes next year. Sugar output is expected to touch 192 lakh tonnes during the 2005-06 sugar session as against the annual consumption of 185 lakh tonnes.

The Centre would review the policy of banning export of sugar and allowing imports in consultations with state Governments in October.

Article Source: http://www.share.onlypunjab.com

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