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Informist, Monday, Apr. 28, 2025

By Taniva Singha Roy

MUMBAI – Ex-mill prices of sugar in the key markets of Uttar Pradesh were steady, but rose in Maharashtra on Monday, traders said. Mills in Maharashtra raised prices after the release of the government's monthly sugar sales quota, they said.

Sweetener prices in Maharashtra rose Monday by INR 20 per 100 kg, after the government released the sugar sales quota for May, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. The Centre set a sales quota of 2.35 million tonnes for May, same as the previous month but down 13% from a year ago, and the quota is deemed to be insufficient to meet the demand during the coming month, Kuvadia said. 

The government fixes the maximum quantity of sugar available for sale every month to support prices and help mills clear the arrears of sugarcane farmers. The government sets the monthly sales quota for each sugar mill. A lower quota restricts mills from selling the sugar they have produced.

Prices are likely to increase further in the coming days, as demand is likely to pick up in May, he said.

Mills in Uttar Pradesh kept prices steady on Monday, but prices are likely to increase in the coming days owing to a lower sales quota, said Naresh Gupta, a trader from north India. "May is a peak summer month and there is going to be good demand from bulk consumers of sugar such as, ice-cream and cold-drink manufacturers," said Gupta.

However, the sugar sector is navigating complex market fundamentals this season--high inventories, a shortfall in production, and a significant slowdown in demand from the last season. Hence, the government has lowerd the sales quota drastically to 2.35 million tonnes this month from 2.7 million tonnes in May 2024 as sales so far suggest that domestic sales this year could dip to 28.0–28.5 million tonnes, MEIR Commodities Chairman G.K. Sood had told Informist earlier. Mills had dispatched 29.0 million tonnes domestically in the 2023–24 sugar season (Oct-Sept).  

The following are the highlights of sugar prices in the domestic market:

--Flat at INR 3,920-INR 4,050 per 100 kg in western Uttar Pradesh

--Flat at INR 3,920-INR 4,050 per 100 kg in central Uttar Pradesh

--Up INR 20 at INR 3,820-INR 3,875 per 100 kg in Kolhapur, Maharashtra

--Up INR 20 at INR 4,026-INR 4,096 per 100 kg in Mumbai, Maharashtra

At 1900 IST, sugar prices on the Intercontinental Exchange were down 2.5% at 17.73 cents per pound, tracking a fall in crude oil prices on the New York Mercantile Exchange. Lower crude oil prices discourage the diversion of sugarcane for the production of ethanol, leading to a rise in sugar supplies.  End

US$1 = INR 85.03

Edited by Tanima Banerjee

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