Informist, Thursday, Nov 16, 2023
By Taniva Singha Roy
MUMBAI – Ex-mill prices of sugar rose in the key markets of Uttar Pradesh and Maharashtra today as the second tranche of the sales quota for November is seen as insufficient, said traders.
Mills in Uttar Pradesh raised prices by another 20-25 rupees per 100 kg, driven by market belief that the allotted sales quota of 800,000 tn in the second tranche will not be sufficient to meet demand.
Even though the government has extended the date for completion of the sales quota of 1.5 mln tn for the first tranche of the month till Nov 30, not many sugar mills have carryover stocks that can add up to the second tranche, said Naresh Gupta a local trader from North India.
Most private mills have already completed their previous sales quota and only a few government mills have leftover stocks, he added.
In Maharashtra, the price of sugar rose by 10–12 rupees per 100 kg as the market considered the sales quota for the second half of November to be limited to meet the demand.
However, the rise in rates of the sweetener in Maharashtra is much lesser compared to a 120 rupees increase in Uttar Pradesh in the past two days, after the government released the sales quota for the second half of November.
Mills in Uttar Pradesh have to pay the farmers state advised price which is higher than the fair and remunerative price that mills in Maharashtra pay the farmers. Hence, the cost of production in Uttar Pradesh is higher compared to that in Maharashtra, which is why the price of sugar is always at a higher level in Uttar Pradesh, Kuvadia added.
Sugar is a highly regulated commodity in India as the government sets a monthly sugar sales quota, export quota, and fair and remunerative price for sugarcane. For the past three years, the government has been fixing the sugar available for sale on a monthly basis to support prices and help mills clear sugarcane arrears.
The following are highlights of the sugar trade in the domestic market today:
Up by 20-25 rupees at 3,925-4,050 rupees per 100 kg in Muzaffarnagar
Up by 20-25 rupees at 3,875-3,990 rupees per 100 kg in Kanpur
Up by 10-12 rupees at 3,740-3,810 rupees per 100 kg in Kolhapur
Up by 10-12 rupees at 3,892-3,996 rupees per 100 kg in Mumbai
On the Intercontinental Exchange, the March sugar contract was at 27.32 cents a pound, up 0.6% from the previous close. Prices rose on expectations of a tighter global supply. Congestion in Brazil’s ports is limiting sugar exports amid tighter supply from Thailand and an export ban in India. End
US$1 = 83.23 rupees
Edited by Ashish Shirke
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