Wednesday, January 9, 2008

Sugar Futures Drop On Profit Booking

Mumbai: Indian sugar futures fell after climbing to contract highs on Tuesday that took gains to about 10 per cent in a week and triggered profit taking.

At 2.51 pm, the January contract on the National Commodity and Derivatives Exchange was down 2.59 per cent at Rs 1,429 ($36.9) per 100 kg after touching a contract high of Rs 1,480.

The February contract fell2.01 per cent to Rs 1,459. Both contracts had risen more than 4 per cent on Monday.

Veeresh Hiremath, an analyst with Karvy Comtrade Ltd, said prices could rebound in the afternoon, tracking spot prices in Kolhapur, a hub for sugar trade in the western state of Maharashtra, where sugar rose 2.53 per cent to Rs1,432.

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India, which is facing a glut, is likely to produce less in the current crop year than was earlier estimated due to late crushing in key cane producing regions.

India is expected to produce28-29 million tonnes of sugar in the crop year to September, lower than earlier forecasts of 32-33 million tonnes but little changed from the previous year's record 28.4 million tonnes, industry officials said.

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