New York sugar hits three-year top

Raw sugar futures ended Friday at another three-year high on all-around buying due to anticipated large sugar imports by India in the 2009-10 season, traders said. The key October raw sugar contract gained 0.17 cent to settle at 18.43 cents per lb. It was the highest close for sugar since the middle of 2006.
The October contract moved between 18.17 and 18.43 cents. Volume traded in the October contract stood at 29,769 lots at 1:52 pm EDT (1752 GMT). March sugar added 0.14 cent to end at 19.48 cents. "India is really running the show (in sugar)," said Jack Scoville, senior analyst for brokers the Price Futures Group in Chicago.
A weak monsoon has sparked a rally in sugar markets on expectations the world's No 1 consumer would need larger imports of sugar in 2009-10. India's cabinet did not announce any decision on raw sugar imports beyond July 31. But most analysts believe a decision will eventually be made given the prospect of a second year of short cane crops. The managing director of India's biggest refiner, Narendra Murkumbi, told Reuters on Friday that India's raw sugar imports in 2009-10 would likely reach 2.8 million to 3.0 million tonnes.
Most in the trade believe the figure is closer to 3.0 million tonnes and some have speculated the amount could hit up to 5.0 million tonnes of sugar. Murkumbi said India would need an additional 4.0 million tonnes, but a part of the requirement would be met by refining raw sugar imported this season.
India's sugar stocks were at 7.6 million tonnes on July 1, down 55.6 percent from a year earlier. The depletion of those stocks is another factor driving the argument of larger Indian sugar imports. India's Farm Minister Sharad Pawar said the annual monsoon rains remain weak in the state of Uttar Pradesh, which normally produces more than half of the country's cane.
Raw sugar prices touched a 25-year peak of 19.73 cents in February 2006. A rally beyond 20 cents would be the highest on the monthly charts for sugar in 28 years. Traders said the October contract's momentum could lift it to key levels such as 18.67 and then 19.20 cents in the coming sessions.
Technicians peg resistance in October at 18.67 cents, with support at 18.09 and 18 cents. Volume traded Thursday in the No 11 sugar market was 133,156 lots, from the prior 62,573 lots - exchange data. Open interest in the No 11 sugar market was at 752,218 lots as of July 23, from the prior 736,159 contracts - exchange data.