The government, earlier in June announced a host of incentives to protect the domestic industry. It increased import duty on raw sugar to 40% from 15%. Subsidies of Rs. 3300/tn on raw sugar export has been extended till September. Ethanol blending with petrol in increased to 10% from 5%. Also, the repayment of interest free loan on excise duty has been increased to 5 years instead of 3 years.
According to the Ministry of Agriculture, sugarcane sowing as on 14th August, 2014 stands at 4.72 mn ha as against 5.03 mn ha last year.
The Maharashtra government in its state budget has exempted sugarcane purchase tax for 2013-14.
The government has raised the FRP on cane for the 2014-15 season to Rs.220/qtl from Rs. 210/qtl.
According to a circular released by NCDEX, some changes have been made in the contract specifications in Oct’14 expiry futures and thereafter.
Outlook
Sugar futures may trade on a mixed note. Threat of suspension of crushing by mills in UP coupled expectations of emergence festive buying may support prices. crop damage concerns in UP may also support prices. However, weak physical demand, higher supplies and lack of fresh export orders may pressurize at higher levels.
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