India Sugar: Flat across key markets on lack of fresh triggers

Informist, Wednesday, Jan 31, 2024

By Afra Abubacker

MUMBAI – Ex-mill prices of sugar in key markets of Maharashtra and Uttar Pradesh were largely unchanged today due to a lack of fresh triggers. Further, sugar prices remained flat as the sales quota for February is seen as sufficient to meet the month’s demand, traders said.

On Jan 29, the Centre released the sugar sales quota of 2.2 mln tn for February. “The sales quota is in line with market expectations and the whole month lays ahead to complete selling the quota,” Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association, said. Sugar prices are likely to be largely rangebound with a 10-15 rupees fall or rise in the near term, he said.

Sugar prices in Uttar Pradesh were flat from the previous day due to a lack of fresh triggers, Naresh Gupta, a local trader, said. “Sugar prices are at a standstill…only refined sugar prices are seeing some upside as mills are quoting higher prices.” But the sales volume of refined sugar is only minimal, he added.

India is expected to produce 31.35 mln tn of sugar after diversion for ethanol production in the ongoing season ending in September, down from 32.82 mln tn in 2022-23, the Indian Sugar & Bio-energy Manufacturers Association said in its second advance estimate today.

Given the limited availability of sugarcane in the country, the government, on Dec 15, capped the diversion of sugarcane juice and B-heavy molasses for ethanol production at 1.7 mln tn. Sugarcane juice, B-heavy molasses, and C-heavy molasses are used as feedstock for the production of ethanol.

With the 2023-24 opening stock in October at 5.60 mln tn, and estimated net sugar production of 31.35 mln, the closing stock is expected to be around 8.45 mln tn as India’s annual sugar consumption is 28.50 mln tn, the association said.

“We believe that the government may now easily allow around 1.8 mln tn of additional sugar diversion for production of ethanol in the current ethanol supply year. Even then, closing stock will be sufficient to cater to the demand for around three months into next season,” the association said.

The following are the highlights of the sugar trade in the domestic market today:

-Flat at 3,610-3,842 rupees per 100 kg in Mumbai

-Flat at 3,580-3,660 rupees per 100 kg in Kolhapur

-Flat at 3,700-3,811 rupees per 100 kg in Muzaffarnagar

At 1913 IST, the most active March contract of sugar on the Intercontinental Exchange was at 24.03 cents per pound, up 0.5% from the previous close. Reduced sugar production in India and Thailand supported global sugar prices.

Sugar mills in India have produced 18.7 mln tn of sweetener so far in the 2023-24 (Oct-Sep) season, down from 19.3 mln tn in the same period last season, National Federation of Cooperative Sugar Factories Ltd said in a press release today. Thailand’s sugar output in 2023-24 is seen down 6% on year to a 17-year low of 7 mln tn due to severe drought conditions, as per Thai Sugar Millers Corp Ltd. End

Edited by Deepshikha Bhardwaj

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