Global sugar prices plummet as Indian importers scrap deals
10 Mar 2010
Sugar futures plummeted on the New York futures exchange on Tuesday after Indian importers scrapped deals totalling around 100,000 tonnes, forcing traders to divert cargoes, sources with sugar traders said.
The Indian Sugar Mills Association (ISMA) has abandoned the import deals amidst a fall in domestic retail prices of the commodity.
Sugar prices in Kolhapur, in Maharashtra, a key Indian market for sugar, is reported to have fallen to around Rs3,037 ($66.5) per quintal (or $665 per tonne) last week, the lowest since October 2009.
Indian sugar mills were forced to abandon import deals, as they feared further hammering of domestic prices in the wake of an expected bumper crop. Sugar production in the country is expected to be around 16.8 million tonnes in the sugar year ending 30 September 2010, higher than the earlier estimate of 16 million tonnes.
Sources close to sugar firms and traders said import deals scrapped by mills could go up to 600,000 tonnes if domestic prices fail to firm up.
On Tuesday, sugar futures on the London market declined from two-decade highs to four-month lows after buyers delayed purchases and waited for prices to fall further.