1. Commodity News

Sugar Prices Increase Ahead of Festive Season

Ayushi Raina
Ayushi Raina
Sugar Export

Sanjay Khatal, managing director of Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), said that the shortage of sugar in the world market and the decline in Brazil's sugar output have led to price increase. 

The overall sentiment in the national sugar market has improved with prices rising by Rs. 400-500 per quintal ahead of the festive season.

Traders attribute the rising prices to the growing demand for Indian sugar all over the world market. The ongoing price of raw sugar for the following season and the reduction of restrictions have led to an increase in demand for the commodity within the domestic market. 

On Friday, the price of small-grade sugar was between Rs.3450 and Rs.3530 per quintal, while the price of medium-grade sugar was between Rs.3580 and Rs.3750 per quintal. Due to the minimum ground worth for sugar, the center set 3,100 rupees per quintal. 

Mukesh Kuvediya, secretary-general, Bombay Sugar Merchant Association have been predicting better gross sales for August due to the festival season. The authorities introduced a quota of 220000 tons for July and reduced to 210000 tons in August. Kuvediya explained, with the increase in world prices, prices in the domestic market are also increasing up. 

Kuvediya said, “Internationally, the prices touched $500 per tonne for refined sugar and 20 cents/pound for raw sugar. Moreover, the government is also easing restrictions and that is opening up a pent-up demand in the market. The upcoming festivals season has also led to a rise in consumption.”  

Merchants said that traditionally, the peak sugar consumption period is seen in August, September and October of every year. Some merchants told that when there was a conflict between transporters and millers in the Kolhapur and Sangli areas of Maharashtra, overloading costs resulted in trucks being stopped from reaching Mumbai, which was also one of the reasons for the hike in value. 

Sanjay Khatal, managing director of Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) stated that the shortage of sugar in the world market and the decline in Brazilian sugar production have led to price increase. 

Khatal stated the crude oil prices have additionally gone up leading to larger sugar prices. Indian millers have realized that it will be very helpful to choose to produce uncooked sugar at the beginning of the season to meet the needs of the world market, and availability of recent stock of white sugar may subsequently decline.

This will cause prices to go up again. He said that as the state of Maharashtra plans to expand its manufacturing capacity from 14 crore liters in 2020-21 to 28-30 crore liters next year, ethanol manufacturing capacity is expected to double. 

“Welcoming the advisory issued by the government that encouraged sugar mills to go in for more export. The market sentiment has improved due to the government push,” stated Prakash Naiknavare, MD, National Federation of Cooperative Sugar Factories (NFCSF).

“The Indian traders have for the first time signed contracts a few months ahead of shipments to export about 725,000 tonnes of raw sugar and 75,000 tonnes of white sugar. Also, traders were ready to absorb a higher sales quota of at least 23 lakh tonne this month because of the festive season and a small quota of 21 lakh tonne has pushed up prices,” stated Naiknavare. 

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