India Sugar
Steady in Maharashtra; ICE prices rise on lower output concerns
This story was originally published at 21:02 IST on 30 January 2025
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By Taniva Singha Roy
MUMBAI – Ex-mill prices of sugar were steady on Thursday in key markets of Maharashtra after rising on Wednesday, traders said. Prices in Uttar Pradesh were mixed with some mills raising prices in anticipation of an increase in demand, while others kept it steady, they said.
Mills in Maharashtra kept prices steady after increasing rates by INR 20 per 100 kg the previous day, said Semal Sudhir Jain, secretary of Kolhapur Karad Sangli Sugar Merchant Association. Prices are likely to increase in the coming month by about INR 50 per 100 kg as market participants are worried about lower availability of sugar amid lower production estimates, Jain said.
The All India Sugar Trade Association has pegged the country's net sugar output in 2024-25 (Oct-Sep) at 26.5 million tonnes, down nearly 17% from 31.9 million tonnes the previous year. The estimate excludes diversion of sucrose for ethanol production.
Sugar production by mills in Maharashtra is seen at 8.3 million tonnes, down nearly 25% from 11 million tonnes in the previous year. Uttar Pradesh's sugar output is seen at 9.0 million tonnes, lower by 13.5% from 10.4 million tonnes a year before.
The main reason for the decline in sugar production in Uttar Pradesh in the current season is the spread of red rot disease in the western parts of the state and floods in the eastern part, with sugarcane having lower sucrose content leading to lower sugar recovery, according to the trade body. In Maharashtra, too, sugarcane yield is lower due to erratic rains and problems of flowering, it said.
Most mills in western Uttar Pradesh cut prices by INR 10-15 per 100 kg as there was poor demand at elevated prices, but mills in the central part of the state kept prices steady, said Naresh Gupta, a trader from north India.
The following are the highlights of sugar prices in the domestic market Thursday:
-Down INR 10-INR 15 at INR 3,730-INR 3,860 per 100 kg in western Uttar Pradesh
-Flat at INR 3,760-INR 3,870 per 100 kg in central Uttar Pradesh
-Flat at INR 3,665-3,740 per 100 kg in Kolhapur, Maharashtra
-Flat at INR 3,787-3,942 per 100 kg in Mumbai, Maharashtra
At 2027 IST, sugar prices on the Intercontinental Exchange were up 0.2% at 19.48 cents per pound. The prices found support from signs of smaller sugar production in India, the world's second-largest producer. The All India Sugar Trade Association has projected the country's net sugar output in 2024-25 (Oct-Sep) to decline 17% on year to 26.5 mln tn. Sugar prices also rose, tracking a rise in crude oil prices in the New York Mercantile Exchange. Higher crude oil prices encourage the diversion of sugarcane towards the production of ethanol, leading to a fall in sugar supplies. End
US$1 = INR 86.62
Edited by Saji George Titus
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