Stock exchange news. The previous article “Sugar market overview: investors are waiting for the situation to be cleared” highlighted the situation in European Union. This article will describe the situation in India (let us remind that India is the 2nd country among producers and the 4th among exporters).
Recent heavy rains in Maharashtra state, where sugar recovery is expected to amount to 9,300 ths. tons, will not harm sugar cane crop. The majority of barrages are overfilled with water that will be used for sugar cane watering. Sugar cane harvesting and processing to make it ready for the use in sugar production will start in September and last till October. For this purpose the government has arranged the operation of 123 mixed mills and 47 private mills so that sugar cane grinding can be started since this October. The assessments of production volume growth in Maharashtra state enabled industry associations and trading houses to predict sugar production in India in 2011/12 to the level of 26.5 mln. tons, which is higher than the previously predicted 24.2 mln. tons.
According to these predictions, it is evident that there is going to be sugar cane surplus, which will enable the country to export, as the yearly consumption in India amounts to about 22-23 mln. tons. This is proved by the statement of the Managing Director of ED & F trading house Rahil Shaikh, in which he spoke about the possibility to export about 3 mln. tons in 2011/12. The Government of the country has allowed the export of 1.5 mln. tons.
Technically, the situation shows that the price has broken the 50-day moving average. What does this mean in terms of well-known to us fundamental background: analytics of Department of Commodity Trading, , suppose that the trend will most likely slow down at the point of the 50-day average, then a short-term ascending trend to the level of 32 is highly likely. After this the market will descend.
