Sugar futures on the National Commodity and Derivatives Exchange Ltd were down 0.12 per cent at Rs 3,286 a quintal at 1.30 pm.

Sugar for December delivery opened lower at Rs 3,288 against the previous close of Rs 3,290. It made a high of Rs 3,297 and low of Rs 3,285 on Tuesday.

The Government has allocated 70 lakh tonnes of non-levy sugar quota for sale between December and March against 59.5 lakh tonnes allocated in the same period last year. The move will curb spike in sugar prices considering lower production for the marketing year 2012-13.

According to the first advance estimates by the Agriculture Ministry, sugarcane output is expected to be lower by six per cent at 335.3 million tonnes against 357.6 mt registered last year. Sugar output is estimated to fall by two mt to 24 mt.

The opening stock for the sugar season started in October was six mt compared with 5.5 mt last year.

India may export about 3 mt of sugar in 2012-13. Domestic supply is estimated at 30 mt against consumption of around 23 mt.

Sugar prices may continue to remain down as the Government has allocated higher quota for the next four months to curb rise in prices.

However, any further delay in cane crushing in Maharashtra and Uttar Pradesh may provide support to the prices at lower levels.

suresh.iyengar@thehindu.co.in

(This article was published on November 27, 2012)
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