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Informist, Tuesday, Nov. 26, 2024

By Afra Abubacker

NEW DELHI – Ex-mill prices of sugar were flat in Maharashtra but fell in the key markets of Uttar Pradesh amid selling pressure as the month-end draws close. Mills have to meet their monthly sugar sales quota as prescribed by the government. "Mills closed sales at lower rates as it is the month-end," Naresh Gupta, a sugar trader from northern India, said.  

For the month, the government had set the domestic sales quota at 2.2 million tonnes for mills across the country. However, bulk buyers were quoting lower sugar rates as demand for the sweetener weakens in winter. Moreover, there is a high supply of sugar in the country with the onset of the sugarcane crushing season, he added. 

Sugar prices were flat in major markets of Maharashtra, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. "People are expecting the December (sugar sales) quota to be out any time. The market expectation is around 2.15 million tonnes," Kuvadia said. Last year, the December sales quota was 2.4 million tonnes. 

The central government fixes the maximum quantity of sugar available for sale every month to support prices and help mills clear the arrears of sugarcane farmers. 

On Monday, Punjab Chief Minister Bhagwant Singh Mann hiked the state-advised prices of sugarcane by INR 10 to INR 401 per 100 kg. With the new state-fixed prices, Punjab farmers will receive the highest rate for sugarcane in the country. Apart from Punjab, states such as Uttar Pradesh, Haryana, and Uttarakhand also intervene in sugarcane pricing by announcing state-advised prices, which are usually higher than the fair and remunerative price, according to the Commission for Agricultural Costs and Prices in its 'Price Policy for Sugarcane (2023-24)' report.

The state advised prices in Uttar Pradesh, the top cane grower is INR 370 per 100 kg for good quality sugarcane, INR 360 for average quality, and INR 355 for poor quality cane. Key sugarcane-growing states announce state-advised prices, while the Centre sets the fair and remunerative price. Both prices are paid by sugar mills to farmers on sugarcane purchases.

Following are the highlights of sugar prices in the domestic market on Tuesday:

-Down INR 30-35 at INR 3,625-INR 3,725 per 100 kg in western Uttar Pradesh

-Flat at INR 3,550-INR 3,570 per 100 kg in Kolhapur, Maharashtra

-Flat at INR 3,736-INR 3,856 per 100 kg in Mumbai, Maharashtra

At 1717 IST, sugar prices on the Intercontinental Exchange were up 1% at 21.44 cents per pound, tracking gains in crude oil prices. Higher crude oil rates are likely to prompt mills to divert more sugarcane towards ethanol than sugar production, thus lowering sugar supplies.  End

Edited by Akul Nishant Akhoury

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