Sugar Futures closed little higher due to firm international prices and reports of lower production in the country keeping the demand higher. India’s sugar production fell by 10 % to 128.6 lt in the first four months of the 2016-17 marketing year that started October last, due to lower cane production in Maharashtra because of drought. Earlier, ISMA has lowered sugar production estimate for 2016-17 to 21.3 mt by about 9% compared to 23.37 mt, projected in Sep 2016.
We expect sugar prices to trade sideways as the prices have reached highest levels in the year and there is an expectation of consolidation at this level. However, lower sugar production estimates by the ISMA this season may keep the prices higher.