SUGAR

FUNDAMENTALS

Sugar spot markets were mostly steady on good offtake amidst ample supply from mills. Meanwhile, the govt. has announced a slew of measures aimed at helping the sugar industry, which include subsidized loans to sugar mills, making 5% ethanol doping in petrol mandatory with immediate effect, allowing mills to produce ethanol directly from sugarcane juice, extension of export subsidy for one year and extension of moratorium on outstanding loans as on April 1, 2005 from two to five years. These, along with the improved demand ahead of the festive season, will prop some support to the sugar prices in the short term. However, no major uptrend in sugar prices is likely, given the glut situation.

TECHNICALS

Doji formation suggests indecision in the market. Prices closed within the recent trading range.  Sugar is in a congestion phase and a breakout is needed to establish a trend. Prices closed above the EMAs, suggesting firm prices. MACD has flattened right at the zero line. While RSI is rising in the neutral region, the Stochastic is flat in the neutral zone, suggesting an indecisive market. Sugar is likely to trade range-bound with a firm bias in the next session

WEATHER

Increased acreage and near normal monsoon points towards higher cane production.

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