The combination of positive sugar harvest predictions and intimations that India might ease its draconian export quotas on the sweetener helped put pressure on raw sugar futures Tuesday.
On ICE Futures, raw No. 11 sugar futures for March 2011 delivery lost nearly 4 percent to trade at 27.26 cents per pound. In Britain, Liffe refined white sugar futures slid 2.45 percent to $710 per metric ton.
According to an Indian agriculture minister quoted by Bloomberg News, total domestic production of sugar in India will total 24.5 million tons, while total consumption will be 22.5 million to 23 million tons in the next year. Inventories stand at about 5.1 million tons of sugar.
"News from India sent the market down in a hurry," Marius Sonnen, the president of New York sugar trader Sonnen & Co., told the news service. "People want some clarity on the amount of sugar that will be available from India."
If India does end up easing its export restrictions, selling as much as 2 million tons of sugar on international markets, sugar futures could take a considerable hit. A tighter export policy would constrict supply a bit more and likely drive up prices.
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