SUGAR

FUNDAMENTALS

Sugar spot markets traded mostly flat at the benchmark centres on poor offtake amidst restricted arrivals. Govt. sops have lost their sheen and fail to enthuse the market anymore, while festive demand is likely to be sustained till Diwali. Meanwhile, the industry is optimistic about the ethanol policy. Estimates put the requirement of ethanol for 10% blending at 1100 million litres and for 5% at 550 million litres. Also, a rise in oil prices and the consequent boost in demand for ethanol are likely to support world sugar prices and help exports. However, sugar prices are expected to remain under downward pressure during most of the 2007-08 season on bumper supplies both in domestic and international markets.

TECHNICALS

Sugar futures failed to emerge from the recent trading range. Candlestick pattern shows indecision in the market, while a close above the short term EMAs indicate a firm market. MACD has flattened out at the zero level, leaving scope for movement in either direction, while a falling Stochastic suggests downward pressure in the market. RSI is moving with an upward bias, favouring bullish trend. Sugar futures are likely to trade sideways with a weak tone in the next trading session. It is ideally recommended to confirm the trend before initiating positions.

WEATHER

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

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