Sugar Back On The Up

After a couple of days consolidating from all-time highs hit late last week, London white sugar futures are back on the upside today, with October currently up $12.80, or 2.3%, at $570/tonne.

A report on Reuters suggests that the Indian government is set to introduce new legislation that would prevent large companies such as Nestlé and Coca-Cola carrying more than 15 days worth of supply of domestic sugar.

Such companies will however be allowed to stock imported sugar beyond 15 days worth of consumption, which will potentially lead to a sharp increase in imports.

India's farm minister said that sugar production prospects this season were "not bright" in the world's largest consumer, after the poor rainy season.

The government are also said to be considering raising the compulsory amount that local sugar mills must sell at low state-set prices from 10% to 20%, as it attempts to stave off rising food prices without having to dip into it's own coffers.

A neat bit of buck-passing initiative being shown there.