Commodities Buzz: India To Decide On Sugar Exports By December Third Week.

India will decide on whether to allow more sugar exports by the third week of December after assessing output estimates, Farm Minister Sharad Pawar said.

We may think of allowing more sugar exports on a monthly basis depending on production and availability, Pawar toled.

India is the world's second-biggest sugar producer after Brazil and the markets have been awaiting news of exports from the South

Asian nation in the hope that the country will fill a world shortfall after weather problems hurt output from other major producers.

Pawar said that despite low recoveries in sucrose due to late rains, the country's sugar production in the marketing year that started Oct. 1 is unlikely to fall below 24.5 million metric tons.

Mills in the main sugar-growing states of Uttar Pradesh and Maharashtra have delayed crushing beyond the normal start of the year in the first week of October. That has prompted the government to wait to get a better idea of output before allowing more exports.

India has already allowed mills to export 1.5 million tons in phases through March, mostly against an obligation against imports of tax-free raw sugar. Sugar exports by India will likely pressure global prices that have remained high due to tight supplies.

Global markets are expected to face their third consecutive season of deficit as slowing production of 134.5 million metric tons leaves a worldwide shortage of 2.8 million tons.
Raw sugar futures for March delivery on New York's Intercontinental Exchange settled at 28.35 cents a pound Monday, up almost 7% from a week earlier. And although prices have soared, with New York raw futures hitting their highest point since the early 1980s, demand is expected to remain robust at 167.5 million tons in 2010, rising to 170.8 million tons next year.

Source : indiainfoline.com