Weekly Review-Sugar
08-Feb-2025 07:26 PM
Sugar prices improve due to better buying conditions
The weekly review on sugar prices shows a steady upward trend due to favorable buying conditions and limited domestic supply. Key highlights from the report include:
Wholesale Market Strength: Sugar prices have been rising steadily, particularly after the Central Government allowed the export of 10 lakh tonnes of sugar. This has driven up demand as exporters are eager to purchase, though millers are hesitant to lower their prices since domestic demand is strong.
Declining Domestic Production: Industry insiders are predicting a significant drop in domestic sugar production—around 45-50 lakh tonnes—during the 2024-25 season compared to the previous one. As a result, millers are not facing the issue of overstock, which gives them the leverage to sell at higher prices.
Price Changes:
- Mill Delivery Prices: The price of sugar in Uttar Pradesh, Punjab, Bihar, and Gujarat increased by Rs 10-30 per quintal, reflecting a positive market trend.
- Spot Prices: Spot market prices saw a substantial jump with prices increasing by Rs 100 to Rs 180 per quintal across key markets like Delhi, Indore, Raipur, and Kolkata.
- Mumbai Market: The Vashi market in Mumbai saw a rise of Rs 80 per quintal, bringing prices to Rs 3900-4100 per quintal.
Export Slowdown: Although there is some effort to export sugar, the process is slow. This is partly due to logistical challenges, as key producing states are far from the ports. Exporters in states like Maharashtra and Karnataka are working to contract with millers in states like Uttar Pradesh and Bihar to fulfill their export quotas.
Overall, while domestic prices are climbing and export activity is moderate, millers seem poised to benefit from a more favorable market, largely driven by reduced domestic production.