Informist, Friday, May 26, 2023
By Sayantan Sarkar
MUMBAI – Ex-mill prices of sugar were flat in the key markets of north India and Maharashtra today as mills are waiting for the release of sales quota for June, traders said.
The government may decrease the sales quota for mills in June as it is a lean month for demand amid lack of weddings and festivals, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association.
Moreover, the arrival of monsoon will also bring relief from summer heat and could likely bring down sales of ice creams and soft drinks, he said.
The sugar sales quota for May was set at 2.4 mln tn, and Kuvadia expects the government to decrease it to 2.3 mln tn in June.
India is the world’s second-largest producer of sugar, behind Brazil. Sugar prices are closely monitored by the government as it is one of the key ingredients in the Indian diet and, hence, is a politically sensitive commodity.
On Thursday, the government released its third advance estimate for major food grains for the 2022-23 (Jul-Jun) season. It expects sugarcane production to touch a record high of 494.2 mln tn during the period, which is 12.5% higher than last year’s output.
India’s sugar production is projected to rise to 36 mln tn for 2023-24 (Oct-Sep), up 12.5% from 32 mln tn this year due to higher acreage and yields, according to the US Department of Agriculture report on Thursday.
India’s sugar imports are forecast to be unchanged at 1.0 mln tn, while exports are seen to rising marginally to 7.0 mln tn from 6.5 mln tn as the government is likely to maintain export quotas to control inflation, it said.
Following are the highlights of sugar trade in the domestic market today:
–Flat at 3,580-3,650 rupees per 100 kg in Muzaffarnagar
–Flat at 3,590-3,700 rupees per 100 kg in Mumbai
–Flat at 3,470-3,540 rupees per 100 kg in Kohlapur
At 1831 IST, the July futures contract of sugar on the Intercontinental Exchange was up 0.8% at 25.03 cents per pound. Sugar prices rose after falling for the previous three sessions as investors resorted lower-level buying.
Also, a surge in fresh COVID-19 cases in China dampened the demand outlook from the world’s second-largest economy.
Global sugar production is expected to rise 6.0% on year to 187.9 mln tn in 2023-24 as higher production in Brazil and India is likely to offset a decline in Russia, according to the US Department of Agriculture report. End
US$1 = 82.57 rupees
Edited by Maheswaran Parameswaran
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