Danielle Rossingh, Bloomberg
London: White sugar fell in London after India, the world’s second-biggest producer, said it may double exports of the commodity this year, adding to a global supply surplus.
India may export as much as 2 million metric tons this year, twice the initial forecast, because of incentives proposed by the government to boost shipments amid a record production. World sugar production is headed for a surplus in the year through September following three years of deficit as India and Brazil, the top grower, harvest record crops.
“There is absolutely no good news coming out of the sugar market,” Sudakshina Unnikrishnan, an analyst with Barclays Capital in London, said by phone today. “Speculative interest is weak, there is a strong rise in global sugar supply from countries such as Brazil, India, Thailand and Australia, and nothing much has changed on the demand side.”
Refined, or white, sugar futures dropped $4, or 1.2%, to $337.60 a metric ton as of 10:40 am local time on the Euronext.liffe exchange. They declined 3.5% last year after surging 37% in 2005.
The Indian government will pay exporters up to Rs1,400 a ton to help meet the transportation costs to the ports, Press Trust of India said on 27 March, citing farm minister Sharad Pawar. India’s cane-crushing season ends in September.
“The subsidy has made Indian sugar very competitive and we should comfortably export 2 million tons this year,” Narendra Murkumbi, managing director of Shree Renuka Sugars Ltd, India’s third-biggest producer, said in a phone interview. Exports could “easily” reach 3 million tons next year, he said.
Among other so-called soft commodities traded in London, cocoa gained 6 pounds to 1,053 pounds ($2,068.93) a metric ton, while robusta coffee rose $3 to $1,564 a ton.