Sugar prices rise ahead of the holiday season
General sentiment in the sugar market across the country has improved, with prices rising from Rs 400 to Rs 500 per hundredweight before the holiday season. Traders attribute the rise in prices to growing demand for Indian sugar in the world market, ongoing agreements for raw sugar being reached for the next season and fewer restrictions resulting in increased demand for this product in the market. interior.
On Friday, prices for low-grade sugar were between Rs 3,450 and Rs 3,530 per quintal, while prices for medium-quality sugar were between Rs 3,580 and Rs 3,750 per quintal. The Center has set 3,100 rupees per quintal as the minimum floor price for sugar.
Bombay Sugar Merchants Association general secretary Mukesh Kuvediya, traders expected a higher sales quota for August due to the holiday season. The government announced a 22 lakh ton quota for July and reduced it to 21 lakh ton in August. With the rise in international prices, tariffs in the domestic market are also increasing, Kuvediya explained.
“Internationally, prices have reached $ 500 per tonne for refined sugar and 20 cents / pound for raw sugar. In addition, the government is also relaxing the restrictions, which opens up pent-up demand in the market. The upcoming festival season has also resulted in increased consumption, ”Kuvediya said.
Traditionally, peak sugar consumption is observed every year in August, September and October, traders said. Some traders said that a stalemate between transporters and millers in the Kolhapur and Sangli areas of Maharashtra, overloading fees prevented trucks from getting to Mumbai and this could also be one of the reasons for the price increase.
Sanjay Khatal, general manager of the Maharashtra State Federation of Cooperative Sugar Factories (MSCSFF) said the shortage of sugar in the world market and a decline in sugar production in Brazil has caused prices to skyrocket.
Khatal said crude oil prices have also increased, causing sugar prices to rise. Indian millers have realized that it would be more beneficial to engage in the production of raw sugar early in the season to meet the needs of the world market and, as a result, the availability of fresh stock of white sugar may decline. This will drive up prices again. Again, ethanol production capacities are expected to double, with Maharashtra expected to increase its production capacity from 14 crore liters in 2020-2021 to 28-30 crore liters in the coming year, he said. declared.
“Welcoming the advice issued by the government which encouraged the sugar factories to export more. Market sentiment has improved thanks to government pressure, ”said Prakash Naiknavare, MD, National Federation of Cooperative Sugar Factories (NFCSF). “Indian traders first signed contracts a few months before shipments to export around 725,000 tonnes of raw sugar and 75,000 tonnes of white sugar. In addition, traders were ready to absorb a higher sales quota of at least 23 lakh ton this month due to the holiday season and a small quota of 21 lakh ton drove the prices up, ”said Naiknavare.