SUGAR

FUNDAMENTALS

Spot sugar traded flat on slack demand and subdued trading activity at the major centres across the country. The market is likely to find some support in the festive demand till Diwali after which the market is seen weak. No major price advances in sugar prices are likely in the medium to long term, given the glut situation. ICAR predicts Indian sugar output of 32-33 MMT in 2007-08 on account of favourable weather conditions and increased acreage and production of sugarcane and suggests diversion of cane to ethanol and cogeneration as ways out of the crisis of plenty. However, the global sugar prices are likely to get some support, from rising crude oil prices, sluggish Brazilian sugar outlook, surging Asian demand and Indian farmers shifting to alternative crops. Meanwhile, delay in crushing of cane in India is likely to result in diversion of more cane to gur production, which could limit sugar output.

TECHNICALS

Long upper shadow of candle shows tentativeness at higher levels. Prices closed above the short term EMAs, suggesting firmness. MACD is rising in the positive territory, while Stochastic is ascending in the neutral region, favouring further uptrend. RSI is dipping in the neutral region, which supports bears. Sugar futures are likely to trade range-bound with a firm tone in the next session.

WEATHER

Late season rains in the north and south India aid developing sugarcane crop.

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