Informist, Wednesday, Oct 18, 2023
By Taniva Singha Roy
MUMBAI – Ex-mill prices of sugar fell slightly in the key markets of Uttar Pradesh for the second consecutive day due to lack of demand at higher levels. Prices remained unchanged in Maharashtra as demand and supply were steady, said traders.
Sugar prices in Uttar Pradesh declined by 5 to 10 rupees per 100 kg from Tuesday as demand fell after mills raised prices last week owing to firm demand ahead of festivals. Trade is still being executed at higher prices since last week.
Buyers who booked the commodity at higher quoted prices are being pressured by mills to lift their stocks amid falling market prices, said Naresh Gupta, a local dealer from north India.
“Once there is a requirement for additional stocks in the market, prices will increase,” Gupta said.
In Maharashtra, prices remained unchanged from Tuesday due to stable demand and supply, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.
Shortage of production and output in some sugarcane growing states might lead to a surge in prices in the domestic market, said traders. Sugarcane output in Maharashtra is likely to fall 21.3% to 106.8 mln tn in 2023-24 (Jul-Jun), according to the first advance estimate released by the state government.
However, in a bid to control prices, the government has extended curbs on the export of sugar beyond Oct 31, according to a notification from the Directorate General of Foreign Trade earlier today.
Additionally, in order to monitor prices, the Department of Food and Public Distribution has urged sugar traders, retailers, wholesalers, big chain retailers, and processors to disclose their stock positions every Monday.
Sugar is a highly regulated commodity in India and the government comes up with various methods to keep prices from rising sharply.
The following are highlights of the sugar trade in the domestic market today:
-Flat at 3,880-4000 rupees per 100 kg in Mumbai
-Flat at 3,730-3,820 rupees per 100 kg in Kolhapur
-Down 5-10 rupees at 3,780-3,900 rupees per 100 kg in Muzaffarnagar
-Down 5-10 rupees 3,850-3,950 rupees per 100 kg in Kanpur
On the Intercontinental Exchange, the March sugar contract was at 27.53 cents per pound, up 0.2% from the previous close.
Prices of the commodity rose, tracking sharp gains in crude oil prices. Sugarcane is used for the production of ethanol, which is used for blending with fuel. Higher crude prices lead to a higher diversion of sugarcane towards the production of ethanol and decreases the production of the sweetener.
Further, export restrictions on sugar supplies from India, one of the major sugarcane producing countries, have supported prices of the commodity in the international market today. End
US$1 = 83.25 rupees
Edited by Tanima Banerjee
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