Indian sugar buyers may delay imports as domestic prices fall
Thursday, 17 September 2009
NEW DELHI, Sept. 16 (Bloomberg): Raw sugar buyers in India, the world's biggest consumer, may delay imports on speculation domestic prices might decline when cane crushing begins, according to JRG Wealth Management.
Domestic prices may fall as much as 15 per cent by November after recent rains improved the crop's prospects, said Harish Galipelli, vice president and head of research at JRG Wealth. Further controls expected from the government will also curtail any increase in prices.
"Definitely, the government won't let prices rise and that is a limiting factor for the importers," Galipelli said in a phone interview from the southern city of Kochi yesterday. "One should wait for some more time," he said, adding that imports will only be "feasible" once advance estimates of domestic production are available.
Raw-sugar futures in New York more than doubled this year as dry weather risked curbing output in India and excess rain hampered the harvest and yields in Brazil. Slowing imports by India, the world's second-largest producer, may lower prices.
"I will be waiting for some more time for prices to fall before deciding on my next purchases," said Arhant Jain, executive president of finance at Dhampur Sugar Mills Ltd. "It will all depend on international as well as local prices."
Raw-sugar for March delivery dropped 1.6 per cent to 23.32 cents a pound in New York yesterday, trimming the commodity's gain this year to 98 per cent.
Sugar has topped gains among the 19 raw materials in the Reuters/Jefferies CRB Index on International Sugar Organisation forecasts for an 8.4 million metric ton supply deficit in the year starting October. It estimated a 10.4 million ton deficit this season.
Domestic prices may fall as much as 15 per cent by November after recent rains improved the crop's prospects, said Harish Galipelli, vice president and head of research at JRG Wealth. Further controls expected from the government will also curtail any increase in prices.
"Definitely, the government won't let prices rise and that is a limiting factor for the importers," Galipelli said in a phone interview from the southern city of Kochi yesterday. "One should wait for some more time," he said, adding that imports will only be "feasible" once advance estimates of domestic production are available.
Raw-sugar futures in New York more than doubled this year as dry weather risked curbing output in India and excess rain hampered the harvest and yields in Brazil. Slowing imports by India, the world's second-largest producer, may lower prices.
"I will be waiting for some more time for prices to fall before deciding on my next purchases," said Arhant Jain, executive president of finance at Dhampur Sugar Mills Ltd. "It will all depend on international as well as local prices."
Raw-sugar for March delivery dropped 1.6 per cent to 23.32 cents a pound in New York yesterday, trimming the commodity's gain this year to 98 per cent.
Sugar has topped gains among the 19 raw materials in the Reuters/Jefferies CRB Index on International Sugar Organisation forecasts for an 8.4 million metric ton supply deficit in the year starting October. It estimated a 10.4 million ton deficit this season.