Sugar prices to trade sideways: Angel Commodities

Angel Commodities’ report on Sugar

Sugar Futures closed higher on Thursday on technical buying on expectation of good physical demand. However, the prices may get support on expectations of higher demand for sugar in coming weeks. Stockists and industrial buyers are active in buying sugar from the mills which may keep the sugar prices firm in next three months. Recently government hiked Sugar import duty to 50 per cent to support domestic prices. India’s sugar production is set to re bound from a seven – year low as above – normal monsoon rain in  the world’s largest consumer helps the cane crop that will be  crushed from Oct. 1. ICE Sugar futures continue to gain supported by strength of Brazil’s real currency. The currency’s gains support prices of dollar – traded commodities like sugar, as it reduced exporters’ incentive to sell.  As per UNICA, Brazil’s c enter – south region produced 3.101 mt of sugar in the first half of July. Prices pressurize further after a Brazilian federal judge suspended a large fuel tax increase.

Outlook

Sugar futures may trade sideways on sufficient supplies in the domestic market Production is expected to be higher by 25% in  2017/18. Increase in FRP is encouraging farmers to take sugarcane crop while good sowing progress in the country will keep pressure on the sugar prices.

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