There is little chance of sugar prices softening

01-Aug-2024 12:11 PM

New Delhi. The Union Food Ministry has fixed a domestic free sale quota of only 22 lakh tonnes of sugar for the month of August, which has become effective from today.

This quota is less than 24 lakh tonnes in July and 23.50 lakh tonnes in August 2023. Experts say that if no additional quota is issued in the coming days, the price of sugar will remain strong during the current month and the possibility of softening will be diminished.

August is the first month of the festive season in which the demand and consumption of sugar usually increases somewhat. Good industrial demand for sugar also remains intact.

According to trade analysts, the industry has a huge surplus stock of sugar while the new marketing season for crushing sugarcane is going to start from October 2024. Mills may get some relief if the price of sugar remains high in August because this time its earnings remained limited due to low production of ethanol.

There is a possibility of a period of huge fluctuations in the prices of sugar but it will depend on the buying by dealers and stockists.

Millers will not be in a hurry to sell their fixed free sale quota and hence they can make their own sales strategy.

There is no huge pressure of quota on them. The government is also going to consider the proposal to increase the ex-factory minimum selling price (MSP) of sugar.