Weekly Review – Sugar

30-Nov-2024 06:58 PM

Sugar Prices Continue to Soften Due to Weak Demand

Sugar prices have been falling intermittently since the end of the festive season, mainly due to weak industrial demand.

Quota for December
The government has issued a free quota of 22 lakh tonnes of sugar for December, similar to November's quota. This should be adequate given the ongoing weak industrial demand. Although the marriage season and auspicious festivals are still ongoing, mills were forced to increase sugar sales between November 23 and 29 to meet the fixed quota.

Mill Delivery Prices
During the review week, mill delivery prices saw the following trends:

  • Eastern Uttar Pradesh: Fell by Rs 48 per quintal
  • Punjab: Decreased by Rs 31 per quintal
  • Madhya Pradesh: Dropped by Rs 10 per quintal
  • Western Uttar Pradesh: Saw an increase of Rs 10 per quintal
  • Gujarat: Declined by Rs 15 to Rs 80 per quintal

Spot Prices
Spot market prices also softened, with the following changes:

  • Delhi: Fell by Rs 40 to Rs 3980/4120 per quintal
  • Indore: Decreased by Rs 50 to Rs 3825/3920 per quintal
  • Raipur & Mumbai (Vashi): Prices remained stable
  • Kolkata: Declined by Rs 40 to Rs 3950/4030 per quintal

The port delivery price in Maharashtra remained unchanged at Rs 3570/3770 per quintal.

Tender Prices
In the tender market, sugar prices experienced slight reductions in Maharashtra, falling by Rs 25 to Rs 55, ranging between Rs 3375/3535 per quintal. However, in Karnataka, the tender prices increased to Rs 3400/3560 per quintal.

Sugarcane Crushing and Production
Sugarcane crushing and sugar production have commenced in top-producing states like Maharashtra, Uttar Pradesh, and Karnataka. However, with the commercial export of sugar banned, millers are compelled to sell their production in the domestic market, where demand remains weak. The increased production of jaggery and khandsari is further dampening sugar demand, particularly in rural areas. Given these factors, it is unlikely that domestic sugar prices will rise sharply in the near future.

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