Sugar Continues to Rule Stable amid Sluggish Demand, Uptrend unlikely ahead

NEW DELHI, Dec 2 (Commoditiescontrol) - Sugar prices stayed unchanged in most of the country on Thursday. Despite the release of lower quota for the current December, underlying sentiments remained weak. Traders said that support from demand is not coming in the market. There are also signs of softening from overseas markets. According to the industry, the production of sugar in the two months till November has been around four lakh tonnes, 10 per cent higher as compared to the same period last season. There is a possibility of further pressure in the market.

No mill has increased the rate of sugar in Uttar Pradesh today. According to traders, due to sluggish demand, traders are forced to sell the sugar bought in the past lower Rs 5-10. However, there is not much selling at low prices. Traders are not ready to reduce the price. The mills, which were expecting the price to rise two days ago, are also trying to somehow maintain the price at the current level.

According to industry body Indian Sugar Mills Association, 47.21 lakh tonnes of sugar was produced in October and November as against 43.02 lakh tonnes last year. During this, about 3.5 million tonnes of sugar export deals from India were done for the current season. Raw sugar was trading at around 20-21 cents a pound in the international market at the time of export deals. However, the prices of raw sugar declined later. According to ISMA, export deals of Indian sugar will be possible only if the price of raw sugar remains above 21 cents in the world market.

On the other hand, the prices of sugar remained stable in the markets of western and southern region including Maharashtra. There was no change in the mill rate either. According to market sources, the demand remained sluggish in the market. The availability of less sugar also did not strengthen the sugar. Sources say that the demand remains very sluggish. But the mills did not cut the rate. Instead of reducing the rate, they are waiting for the demand to improve.

Raw sugar is being sold at Rs 3100-3150 and white sugar at Rs 3200-3250 per quintal for export in Maharashtra and adjoining states of the port. New York Raw Sugar showed stability, while White Sugar softened slightly. After touching a three-month low, there was a recovery in raw sugar due to the improvement in crude oil. Last night, ICE March Raw Sugar settled at an earlier level of 18.60 cents a pound. March white sugar fell 0.3 per cent to $484.20 a tonne.