Weekly Review-Sugar

15-Feb-2025 07:31 PM

Sugar prices soften due to weak buying at high levels

The sugar market has been experiencing a period of price fluctuations due to a combination of factors. Despite the government approving the export of 10 lakh tonnes of sugar and indications of a decrease in domestic production, weak demand at high prices has led to a softening of prices during the week of 8-14 February.

Mill Delivery Price:

• In eastern and western Uttar Pradesh, prices dropped by Rs 50-55 per quintal.
• In Punjab, there was a decrease of Rs 56 per quintal.
• In Bihar, the drop was Rs 61 per quintal.
• Conversely, prices increased in Madhya Pradesh (Rs 30) and Gujarat (Rs 10-40).

Spot Price:

• In Delhi, prices fell by Rs 30 to Rs 4350-4450 per quintal.
• In Indore, prices dropped by Rs 40 to Rs 4100-4200 per quintal.
• Raipur saw a Rs 50 drop to Rs 4100-4200 per quintal.
• However, Mumbai (Vashi) and Kolkata markets saw no change in their prices.

Purchase/Sale Dynamics:
There is a disagreement between millers and exporters regarding sugar prices. Millers are satisfied with domestic prices and want higher prices for exports, while exporters are cautious, observing global market fluctuations.

Quota and Consumption:
The free sale quota for February isn't large enough to burden mills, and domestic consumption remains steady, allowing millers to make a profit despite the market fluctuations.

In summary, while domestic consumption remains stable, weak buying at elevated prices and the ongoing price disagreements between millers and exporters are contributing to the recent softening in sugar prices.