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Domestic Sugar Prices Continue To Rule Weak On Selling Pressure

23 Jan 2020 7:28 pm
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NEW DELHI (Commoditiescontrol) - Prices of sugar continued to rule weak in most wholesale markets across the country on Thursday due to selling pressure on mills ahead of the month-end and on sluggish demand.

As per traders, demand is limited despite the ongoing marriage season, while mills are rushing to liquidate their stocks. The government had fixed the monthly sales quota for January at 22 lakh tonnes.

However, the outlook is slightly bullish due to the optimism over export demand amid surge in global prices.

Global sugar prices have risen by 20 percent in the last three months after supply crunch from Thailand due to dry season.

India has exported over two million tonnes of sugar in sugar year 2019-20 so far and is expected to export upto five-six million tonnes by the end of the sugar year. The government has allowed upto six million tonnes of export, which attracts Rs 10.5 per kg subsidy.

Meanwhile, banks have disbursed loans to only 36 mills for addition and expansion of distillery capacity for ethanol production.

Only Rs 10 billion have been disbursed of the Rs 61.4 billion soft loan the Centre had approved to help mills boost ethanol output.

As part of an incentive scheme announced in June 2018, the Centre had approved soft loans for mills to set up new distilleries or upgrade existing ones, expand capacity, and encourage them to divert cane to ethanol.

Of the 282 applications the government received for addition and expansion of distillery capacity, 114 were approved in September 2018. Of these, only 55 mills have been sanctioned loans worth about Rs 27 billion.

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