| Prices have been depressed in the spot market as well as on the futures exchanges since March 15. |
| India has an estimated low production, with a simultaneous rise expected in the summer demand. |
| The prices of the S-30 variety have dipped from Rs 1,760/1,800 per quintal to Rs 1,757/1,790, while the M-30 variety has slipped from Rs 1,795/1,838 to Rs 1,787/1,835 per quintal. |
| In the futures market, the May contract for S-grade variety on the National Commodity and Derivatives Exchange of India (NCDEX) moved down from Rs 1,830 per quintal on March 15 to Rs 1,720 as on April 23. |
| According to Vineet Rai, assistant vice-president, business development (Commodities), Angel Commodities Broking, the fall in prices is contrary to sentiment "" prices should have risen with demand but it has not. |
| Instead, factors such as good-crop forecasts and increased imports, and talk of heavy short-selling (by importers of raw sugar, large trading houses and industry associates on the futures exchanges) have weighed down prices. |
| "The expectation in the market is that prices may fall afresh by Rs 60 per quintal," Rai said. |
| Summer demand is expected to support the market around Rs 1,785 (NCDEX May contract) and once demand picks up, buying would be robust as stocks with the traders are at an all-time low and the market is looking good for short-covering. |
| The current season production is tipped at over 130 lakh tonne. This is higher compared with the earlier expected production of roughly 115 lakh tonne. India's consumption stands at 190 lakh tonne and the carry-over stock according to government estimates stands at 85 lakh tonne as on October 1 2004. |
| However, market sources reveal that this is likely to be only about 65-70 lakh tonne. |
| Further, according to Himanshu J Shah, chief executive officer of Esugarindia Ltd, these figures could be backed by the import of raw sugar into the country, and the government has not issued a clarification on this information. |
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