Sugar hits contract low on imports, weak demand

Indian sugar futures hit a contract low on Wednesday on sluggish demand and as a sharp drop in overseas prices raised hopes of higher imports of raw sugar in the coming months.

* Raw sugar prices in New York settled close to two-and-a-half-year lows on Tuesday as speculative investors and traders continued to sell the sweetener amid concerns about a growing surplus following forecasts of a record crop from Brazil, the world's biggest producer, in 2013/14.

* At 0915 GMT, the key February sugar contract on India's National Commodity and Derivatives Exchange was down 0.59 percent at 3,211 rupees ($59.67) per 100 kg, after hitting a low of 3,208 rupees.

* Sugar edged down by one rupee to 3,262 rupees per 100 kg in the Kolhapur spot market in the top-producing Maharashtra state.

* "The current difference between local and overseas prices is enough to prompt mills to place new import orders. Local production is more than demand. In such a situation imports would put downward pressure on prices," said a Mumbai-based dealer.

* India has contracted to import 920,000 tonnes of raw sugar since the season began in October, turning into a net importer for the first time in two years despite surplus stocks at home, a senior industry official said.

* Mills in India are expected to churn out 24 million tonnes of sugar in 2012/13, down from 26 million tonnes in the previous year, but higher than the expected local consumption of about 22 million tonnes.

* India's sugar output rose 3 percent to 10.8 million tonnes in the first three-and-a-half months of the season beginning October, a leading industry body said on Thursday.

* Demand for the sweetener from bulk consumers like cold drink and ice cream makers usually drops in India during winter.

ALSO READ

Sugar futures prices rise after govt removes curbs

Sugar manufacturers shares cheer partial decontrol of sector, up 16%

Govt decontrols Rs 80,000-crore sugar sector, says prices not to go up

Export of sugar 'banned' for up to 3 years by Indian government