Mumbai (Commodities Control) - Sugar prices have given up all the strength it had garnered ahead of the decision to raise the minimum selling price (MSP) of sugar by Rs 2. Prices have dropped 3-4% in Uttar pradesh and Maharashtra during a month’s time.
Although further drop in prices is most unlikely due to ease in lockdown restrictions along with firm global raw sugar prices, that are close to five months’ high. Sugar prices are expected to recover, hereon.
Mill rate of M-31 sugar variety was quoted at Rs 3340-3380 per quintal on 9th July in Uttar Pradesh. The commodity price has fallen to Rs 3240-3270/Quintal. In Maharashtra, sugar prices slid to Rs 3150-3280 levels. Since mid-July, sugar prices have constantly been under pressure post the announcement of rise in MSP.
Traders reveal that despite ease in lockdown restrictions, demand is yet to pick up. Sugar demand has barely risen by 15-20% since April-May.
According to a Delhi-based sugar trader, “people are still scared, which is why they are reluctant in eating out, due to which demand continues to be slow at sweet-snacks shops.”
It is to be noted that the summer demand was ruined due to the dull consumption of cold drinks and ice creams. Even recent festivals like Raksha Bandhan were lacklustre in terms of demand for sweets. Major consumption centres like Delhi and Mumbai continue to be shut.
Meanwhile, according to a Bareilly-based sugar wholesale Dealer- Rajendra Khandelwal, “ Sugar prices have bottomed out. It is true, though, that demand is much less as compared with last year. However demand is improving and Diwali seems hopeful in terms of major consumption.”
He adds, the minimum selling price for sugar will rise by Rs 2 from 1st october and cane- crushing is expected to start, at the mills, around the time of Diwali. This is conducive for price rise. However, sugar output of 305 Lakh tons is expected during the new season. This may limit gains to around a rise of Rs 150 per Quintal until Diwali.
Meanwhile sugar prices have risen in global markets to touch 5 months’ high. ICE sugar has reached 13 cents per lb, while LIFFE white sugar has crossed $372 per ton.
It is to be noted that there will likely be a shortage of 1.3 million tons of sugar in the new sugar season, previously a deficit of five lakh tons was anticipated in the month of June. This can be a good time to boost Indian sugar exports.
Industry sources reveal that there’s a likelihood of touching 5 million tons of exports this year, while exports of 4.8 million tons has been already achieved until June.
(Commodities Control Bureau)
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