Cogencis, Thursday, Aug 9

    By Ashna Mishra
    NEW DELHI - Prices of sugar continued to decline in the key wholesale markets of north India due to weak demand from bulk buyers.
    Medium-grade sugar was sold at 3,435 rupees per 100 kg in Muzaffarnagar, down 25 rupees from Wednesday. In Delhi, prices fell by 10 rupees per 100 kg to 3,480 rupees.
    "In central UP (Uttar Pradesh), prices of sugar fell even more today. They were down by at least 30 rupees (per 100 kg)," a trader from Muzaffarnagar said.
    Prices were, however, unchanged in the key wholesale markets of Mumbai and Kolhapur today due to a statewide 'bandh' called in Maharashtra by some factions of the Maratha community.
    "There is almost no trade in the markets today because of the Maratah Andolan," Mumbai-based trader Mukesh Kuvadia said.
    The Maratha Kranti Morcha has been holding protests since the last few months, demanding at least 16% quota in education and jobs. Though the protests till June were peaceful, a statewide 'bandh' in July had seen incidents of violence and damage to public property.
    On the InterContinental Exchange, futures contracts of raw sugar were up today due to short covering by investors, analysts said.
    At 1741 IST, the most-active October contract was up 1.2# at 10.94 cents per pound.
    Going forward, international prices of the commodity are likely to take cues from fortnightly crushing data from Brazil, to be released later today.
    Meanwhile, the Indian Sugar Mills Association has urged the government to raise the minimum selling price of sugar to 36 rupees per kg from the current 29 rupees in domestic markets, a source in the know told Cogencis.
    If the floor price of the sweetener for sale by mills is fixed at 36 rupees per kg, sugar factories will be able "to take a loss on the exports without the need of financial assistance", the association said in a letter to the government.
    The government had in May announced an export-linked subsidy of 5.50 rupees per 100 kg on sugarcane crushed this season to help mills clear their dues to farmers and lower the cost of cane purchase. 
    Jittery over the likely surplus sugar output this season, the government had also mandated mills to export 2 mln tn of the sweetener till September under the Minimum Indicative Export Quantity scheme.
    The loss on sugar exports is at 11-12 rupees per kg over the domestic ex-mill prices. It would be higher if calculated over the cost of production of sugar, the association said.

OUTLOOK
    While domestic prices may rise in the near term on account of festival season demand, they are likely to fall in the long run due to likely higher sugar output.

    Following are today's prices for medium-grade sugar, in rupees per 100 kg, in key wholesale markets, and the change from the previous close:

End

US$1 = 68.68 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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