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Informist, Monday, Aug. 25, 2025

 

By Taniva Singha Roy

 

MUMBAI – The Centre is likely to set the sugar sales quota for September at 2.25-2.30 million tonnes, the same as for August or slightly higher, market participants told Informist. While demand will improve due to the Navratri festival, it is expected to last for only the first half of the month as traders will buy during that period, they said. The government is expected to announce the August sales quota on Thursday.

 

The quota for September is expected to be around the same or only slightly higher as the government is likely to allow mills to extend the time to sell the quantity of sugar mills were unable to offload in August, said Seemal Sudhir Jain, secretary of the Kolhapur Karad Sangli Sugar Merchants Association. "The offtake of quota was low during August and demand slowed down at the later half of the month owing to torrential rainfall across the country," Jain said. 

 

The sugar sales quota set by the government for August was 2% higher at 2.25 million tonnes compared to 2.2 million tonnes in June and 2% higher than 2.20 million tonnes in August last year. The quantity was innitially considered to be low, as major festivals were lined up in August. Hence, demand increased at the beginning of the month due to concerns of lower availability and prices increased by INR 90-INR 100 per 100 kg. However, demand could not sustain at such higher price levels, traders said.

 

Naresh Gupta, a trader from north India, expects the sales quota for September to be set at 2.3 million tonnes, a little higher than the current month's quota, due to festival demand. "If the quota is at this range, then prices are going be be more or less at the current level," said Gupta. Currently, sugar prices are in the range of INR 3,890-INR 4,182 per 100 kg across the cuntry. 

 

Prices are likely to remain at current levels if the quota is set at 2.25-2.30 million tonnes. In Maharahtra, prices are likely to be in the range of INR 3,850-INR 3,900 per 100 kg if the quota is as expected, said Jain. "If it is anything more than 2.3 million tonnes, prices will fall. A quota higher than 2.3 million tonnes will be required only in October, when there is Diwali and Dushera," he said. 

 

"If the quota is 2.3 million tonnes, prices will increase by INR 50 per 100 kg," said Mukesh Kuvadi, secretary of the Bombay Sugar Merchants Association.

 

However, G.K. Sood, chairman of MEIR Commodities, expects the government to set the September sales quota at around 2.4 million tonnes owing to festival demand next month. Sood pointed out that the usual discount that mills in Maharashtra offer compared to Uttar Pradesh has now shrunk to INR 1 per kg, and this could narrow further as festival demand builds, he said. "After November, the discount might be back in place," Sood said.

 

He also said that a few mills faced quota cuts in August after overselling their allocated quota in May. However, he clarified that these reductions were not meant to squeeze overall market supply. "The government had cut quota to respective mills, not the market," Sood said, adding that the deducted quotas were redistributed among other mills.

 

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 2025-26 (Oct-Sept) is estimated to rise 18.3% on year to 34.9 million tonnes million tonnes from 29.5  million tonnes last year, according to the All India Sugar Trade Association. 

 

Higher sugar production in the coming sugar season is likely to keep prices in the current range, market participants say. Prices are likely to remain steady despite the upcoming festivals, as there will be no speculative buying due to expectations of higher sugar production starting October, said Sood. "Until November-end, prices will remain steady and December onwards when sugar production is at its peak, prices will start falling," he said.  End

 

With inputs from Afra Abubackar

Edited by Avishek Dutta

 

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