India Sugar:Rises in north as mills export on surge in global prices
Friday, Feb 14
By Preeti Bhagat
NEW DELHI – Prices of medium-quality sugar in the wholesale markets of north India rose today because mills are exporting the sweetener due to parity with international prices, dealers said.
Prices rose 10 rupees per 100 kg in Delhi and 5 rupees in Muzaffarnagar.
Raw sugar is currently being sold at 25 rupees per kg and white sugar exported at 27 rupees, both free on board. The government provides subsidy of 10.5 rupees per kg on exports.
Global prices of the commodity are at multi-year highs, and as crushing is underway, Indian mills have seen an opportunity to use the situation to their benefit.
In the season that started Oct 1, contracts to export 3.2 mln tn of sugar have been signed so far, of which 1.7 mln tn is likely to be shipped out by the end of this month, according to industry estimates.
“I’m optimistic that 5 mln tn will go out. Prices will also rise during Mar-Apr because of exports as crushing will end which will reduce pressure on mills,” said Rahil Shaikh, managing director of Meir Commodities India.
In the ongoing season, mills in Uttar Pradesh, the largest producer, crushed 59.11 mln tn of cane to produce 6.5 mln tn sugar as of Thursday at a recovery rate of 11.13%, data from Uttar Pradesh Sugar Mills Association showed.
Today, prices were steady in Mumbai and Kolhapur in Maharashtra due to lack of fresh cues.
The most active May contract on the Intercontinental Exchange Futures US was at 15.29 cents per pound, up 0.86% from the previous close.
“Fundamentals changed due to a lower crop in Thailand. Market looks more stable to bullish rather than bearish because of uncertainty in the world market. If it’s fund-driven and specs decide that market is bullish, then prices may rise to 16-17 cents,” Shaikh said.
“With the harvest in Thailand expected to draw to an early close and production well down, we expect trade flows in raws to remain tight until the Brazil harvest gets well underway. Sugar is currently ignoring macro fears, and we don’t know if this is right, but we prefer to follow the trend which still remains very much upwards,” Sucden Financial’s senior trader Nick Penney said.
Following are today’s ex-mill prices of medium-grade sugar in rupees per 100 kg, at key wholesale markets, and the change from the previous close:
Edited by Avishek Dutta
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