Falling prices prompt investors to buy more sugar from NCDEX

Falling prices prompt investors to buy more sugar from NCDEX
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First Published: Tue, Jun 24 2008. 02 41 PM IST
Updated: Tue, Jun 24 2008. 02 41 PM IST
PTI
New Delhi: Falling prices of sugar on the country’s leading agri commodity exchange National Commodity and Derivative Exchange (NCDEX) has encouraged investors to buy more sugar from the bourse.
In the recently matured June contract, investors have bought total 7,370 tonnes of sugar, according to NCDEX data, while deliveries are yet to take place.
Sugar prices of June contract began at a moderate range of Rs1,400-1,500 a quintal and moved down with the nearing of the expiry date.
“A fall in sugar prices during last week of the contract expiry prompted investors to buy the commodity because of spot price, which was ruling higher than futures,” Religare Commodities Analyst Prasoon Mathur told PTI.
At the end of the June contract, sugar prices stood at at Rs1,403 per quintal, while spot prices were higher by Rs27 at Rs1,430 a quintal, he said.
Karvy Comtrade Analyst Veeresh Hiremath said, “This kind of situation, where futures prices are lower than spot, surfaced due to increased supply of sugar in the market”.
The government, which controls sugar supply in the country, allotted free sale quota of 44 lakh tonnes for June quarter.
In order to curb inflationary pressure, it is also willing to off load about 20 lakh tonnes of sugar from its buffer stock of 50 lakh tonnes to step up supplies in the domestic market, market experts said.
Investors, however, took advantage on reports that sugar production is estimated to decline to 26.5 million tonnes in the current season, compared to 28.3 million tonnes in 2006-07 season due to delay in start of crushing in key producing states of Uttar Pradesh and Maharashtra.
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First Published: Tue, Jun 24 2008. 02 41 PM IST
More Topics: Sugar | NCDEX | Investors | Money Matters | Commodities |