ChiniMandi, Mumbai: Monday 6th December, 2019
Domestic: The market witnessed a good demand nationwide with the nearing festive demand of Makar Sankrant and piling of sugar stocks which has begun owing to sharp fall of sugar production in the new sugar season.
Maharashtra: S/30 Sugar trades are taking place at Rs. 3150 to Rs.3170/Qntl.
South Karnataka: S/30 trades are taking place at 3250 to 3375 whereas M/30 trades are taking place at Rs.3370 to 3375.
Uttar Pradesh: The market trades for M/30 are taking place at Rs.3295 to 3450.
Gujarat: S/30 Sugar is trading at Rs.3200 to Rs.3210 and M/30 Rs.3260 to 3280.
Kolkata: The trades for S/30 are taking place at Rs.3550 to 3570 whereas M/30 trades are taking place at Rs.3620 to 3650
Tamil Nadu: S/30 Sugar is trading at Rs.3320 to Rs.3350 whereas M/30 is trading at 3370 to Rs.3375.
*All the domestic rates except Kolkata are excluding GST.
International Market: Good demand was witnessed. According to reports, raw sugar is traded at Rs.21000 to Rs.21100 from Kolhapur region due to freight advantages for Jaigarh port. White sugar of season 2018/19 icumsa 150 ready delivery is traded at Rs.21500 Rs. 21600 on ex factory basis. Demand for white sugar of season 2019/20 icumsa below 100 is at Rs.21800 to Rs.22000 ex. factory basis. From Maharashtra and from Karnataka demand is at Rs. 21600 to Rs . 21750 ex factory basis.
The FOB indication for raw sugar is at $333 to $335. For white sugar icumsa 150 season 2018/19 the FOB indication stands at $338 to 340, for white sugar icumsa 100 Season 2019/20 the FOB indication is $344 to 346.
London White Sugar front month contract is trading at $359.90/tn whereas US Sugar front month contract is trading at 13.43/lb at the time of writing this update.
According to reports, sugar prices on Friday rallied as crude prices soared on Middle East tensions. NY sugar prices on Thursday fell to a 4-week low and London sugar fell a 2-week low on signs that India sugar crushing is picking up its pace. Another negative for sugar was weakness in the Brazilian real which fell -0.68% on Friday to a 1-week low against the dollar. A weaker real encourages export selling from Brazil’s sugar producers.
An extreme long position by funds is a potential bearish factor for London sugar prices after Friday’s weekly Commitment of Traders (COT) data showed that funds boosted their net-long London sugar positions by +2,601 contracts in the week ended Dec 31 to a 13-month high of 13,468 contracts. The large long position could provide the fuel for long liquidation pressure.
Big Picture Sugar Market Factors: World sugar production in 2019/20 (Apr/Mar) will fall -2.3% y/y to 172 MMT, after the +0.6% y/y rise to a record 185.2 MMT in 2018/19 (ISO). The world sugar balance in 2019/20 will tighten to a -6.1 MMT deficit from the +1.7 MMT surplus seen in 2018/19 (ISO). Sugar production by Brazil, the world’s largest sugar producer, in 2019/20 will climb by +17.4% y/y to 34.1 MMT, after production in 2018/19 (Apr/Mar) fell -17.2% y/y to an 11-year low of 31.4 MMT (Conab). Sugar production by India, the world’s second largest sugar producer, in 2019/20 will fall -15% y/y to a 3-year low of 28 MT due to drought and a delayed monsoon season (India’s National Federation of Cooperative Sugar Factories Ltd).
Currency, Commodity & Indian Indices: The rupee traded against the US dollar at 71.937 meanwhile USD traded with BRL at 4.0602, Crude Futures trades t Rs.4593, Crude WTI traded at $63.77. Indian Indices ended in the red owing to the heated situations in the Middle East, with potential supply disruptions, and the consequent rise in the import bill due to surging crude oil prices. Sensex ended 787.98 points lower at 40,676.63 and the Nifty50 settled 233.60 points lower at 11,993.05.
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