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Sugar Stays Weak As Supply Glut In Global Market Takes Toll

Local sugar prices have eased to their lowest levels in around 15 months yet again today as a supply bounty in global markets took its toll on the commodity. Prices had seen some bargain buying in last few after Indian Sugar Mills Association (ISMA) noted that India`s total sugar production for year ended 2012-13 is reported at 25.14 million tonnes, down 4.50% from last year. This was mainly on the account of poor crushing and recovery rate in Tamilnadu and Maharashtra.

However, the global scenario remains unfavorable for the commodity. The global sugar prices slipped towards its lowest levels in two months on ideas that a generous global output could curb the demand for the commodity in near term. The International Sugar Organization (ISO) has raised its estimate for the world sugar surplus in 2013-14 even as it noted that the next season would mark the first output deficit in five years.

The ISO, in a quarterly briefing, lifted by 228,000 tonnes to 4.73m tonnes its estimate of the extent to which world sugar output will exceed consumption this season. However, with expectations for Indian and Thai production on the increase in recent weeks, the ISO raised by 645,000 tonnes to 181.5m tonnes its forecast for world output in 2013-14, while making a small downgrade to ideas on consumption.

Shubhlaxmi Harish

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