SUGAR

FUNDAMENTALS

Sugar prices witnessed rangebound with slightly sluggish sentiments in the domestic markets due to weak demand from the retailers against ample supplies. Sluggish buying interest from retailers against better supply from mills led to fall in select prices. Indian mills are not as enthusiastic for further export commitments due to higher Indian prices. The rise in international prices, too, is prompting them to go slow in entering into fresh contracts and not lock into the existing rates, so as to cover against any upside risk. On the other hand, demand during last few days of the month remained weak because most participants are well covered at the moment. The Government has pegged domestic sugar sales quota for January and February at 1.4 MMt per month.  India's sugar exports are estimated to be around 3 MMt in the marketing year that started in October, up from 1.5 MMt last year. 

TECHNICALS

Candlestick chart suggests bearish trend of the futures market may continue. Prices close below short term 9 & 18 Days EMAs, hinting short-term bearish market. MACD is moving down in the positive territory, exhibiting weak momentum. Stochastic as well as RSI favours bears but technical recovery is due following oversold nature of the market. Strong volume but lower open interest hints profit booking. Sugar is likely to extend the weakness with chances of late recovery.

WEATHER

No concern in the main sugarcane areas at this time.

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