Informist, Thursday, Feb 8, 2024
By Taniva Singha Roy
MUMBAI – Ex-mill prices of sugar in the key markets of Uttar Pradesh fell today for the third straight day due to poor demand even at lower levels, traders said. Prices of sugar in Maharashtra remained steady, as demand and supply were balanced, said traders.
Throughout Uttar Pradesh, mills cut prices by 20–25 rupees per 100 kg today, as demand was poor, said Naresh Gupta, a trader from north India. However, Gupta said that at the lower rates, the market witnessed some buying. Increased buying at these levels could lift prices in the next few days, he said.
Some mills have already cut prices by 50–60 rupees, while some others have even slashed rates by 70–80 rupees per 100 kg this month. In the next two to three days, prices will stabilise and the downtrend might reverse, Gupta added.
In Maharashtra, prices were flat today as demand and supply were at par, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. Prices are likely to fall by 5–10 rupees per 100 kg in the coming week as demand is expected to remain poor, Kuvadia added.
Prospects of increasing sugar production amid restrictions on exports in the current season might also keep prices in the domestic market on the downside. The restrictions on sugar exports are likely to remain in place for the current season ending in September, Informist had earlier reported exclusively, quoting an official from the Department of Food and Public Distribution.
While fluctuations in prices are generally influenced by the monthly sales quota set by the government, an increase in production may not necessarily have any effect on prices, said Kuvadia. Sugar is a highly regulated commodity in India and the government puts various restrictions on the sweetener to keep domestic prices in check. It sets monthly sales quotas and also fixes the prices to be paid for sugarcane to farmers.
The following are the highlights of the sugar trade in the domestic market today:
-Flat at 3,702-3,812 rupees per 100 kg in Mumbai
-Flat at 3,480-3,560 rupees per 100 kg in Kolhapur
-Down 20–25 rupees at 3,700-3,750 rupees per 100 kg in Muzaffarnagar
-Down 20–25 rupees at 3,700-3,770 rupees per 100 kg in Kanpur
At 1717 IST, the most active March sugar contract on the Intercontinental Exchange was at 23.6 cents per pound, down 1.17% from the previous close.
A sharp increase in Brazil’s sugar production is bearish for global sugar prices, according to Batchart.com. On Jan 25, UNICA, the Brazilian sugarcane industry association, reported that output in Brazil’s Center-South jumped 148.6% on year in the first half of January to 48,000 tn and that sugar output in the 2023-24 crop year through mid-January rose 25.5% on year to 42.09 mln tn. End
US$1 = 82.95 rupees
Edited by Avishek Dutta
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