More Stories

Informist, Monday, May 26, 2025

 

By Taniva Singha Roy

 

MUMBAI – The Centre is likely to set the sugar sales quota for June at 2.25-2.30 million tonnes, down from the quota of 2.35 million tonnes set for May, market participants told Informist. This will be good enough for June, they said, as the monsoon has commenced and demand is usually less during the month owing to reduced demand from institutional buyers. The government is expected to announce the June sales quota in a day or two.

 

The sugar sales quota set by the government for May was the same as the quota for April and down nearly 13% from the quota of 2.70 million tonnes set for May 2024. Initially, the May sales quota was seen to be insufficient to meet the usual summer season demand, but demand was lower than expected with health-conscious consumers shifting to alternatives such as jaggery.

 

The quota for June will be slightly lower at 2.25-2.30 million tonnes as demand for the sweetener is usually lower in the month. With temperatures coming down and the onset of the monsoon, demand for ice-creams and soft drinks ebbs, explained Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. "If the quota is 2.25-2.30 million tonnes, sugar prices will fall by INR 20-INR 30 per 100 kg," Kuvadia said. "If the quota is anything less than that, prices are likely to increase by INR 10-INR 20 per 100 kg."

 

Seemal Sudhir Jain, secretary of the Kolhapur Karad Sangli Sugar Merchants Association also expects the quota for June to be set at 2.25-2.30 million tonnes. "Prices will largely remain sideways if the quota is as per market expectations," Jain said.

 

Due to a lower production outlook and falling demand, the sales quota will also be meagre, said Naresh Gupta, a trader from north India. Gupta expects prices to be largely steady at the current levels next month. Sugar is likely to trade in the range of INR 3,750-INR 3,800 per 100 kg, traders 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 also sets monthly sales quotas for each sugar mill. Sugar production in the sugar year 2024-25 (Oct-Sep) is estimated to decline 17% to 26.5 million tonnes from 31.9 million tonnes last year, according to the All India Sugar Trade Association. Additionally, about 550,000 tonnes of the 1 million tonnes sanctioned for export have already been dispached, and the rest will be dispached by September, traders said.

 

In 2023-24, dispatches of sugar from India were high in spite of the government's ban on exports because of smuggling. These unofficial exports leaked from domestic sales, traders said. According to trade consensus estimates, between 700,000 tonnes and 1 million tonnes of sugar was smuggled, mostly to Bangladesh and Nepal. While raw sugar, refined sugar, white sugar, and organic sugar were restricted from being exported, exports of specialty sugars like pharmaceutical sugar were permitted, and smugglers took advantage of this. 

 

This year, however, the Centre has reopened sugar exports. Despite the drop in production as of mid-April, the government appears to be comfortable with the current price levels and stock availability. It has not closed sugar shipments out of the country and has permitted 1 million tonnes of exports in the season ending September.  End

 

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.