Informist, Friday, Dec 8, 2023

By Taniva Singha Roy

MUMBAI – Ex-mill prices of sugar fell in key markets of Uttar Pradesh and Maharashtra due to low demand and markets' expectation of an increased supply of sugar after the government's decision to exempt ethanol production from sugarcane juice or syrup, traders said.

The government on Thursday directed all mills and distilleries not to use sugarcane juice or syrup for ethanol production with immediate effect in the current production year ending October.

However, the supply of ethanol from B-heavy molasses contracted by oil marketing companies so far in 2023-24 can continue, according to a notification from the Department of Food and Public Distribution. 

In Uttar Pradesh, the downtrend continued, and some mills which did not cut prices on Thursday decreased rates by 15–20 rupees per 100 kg today, said Naresh Gupta, a local trader from north India. 

The market view suggests prices are likely to fall by another 40–50 rupees per 100 kg before they stabilise, Gupta said.

In Maharashtra, sugar prices fell slightly by another 5 rupees per 100 kg from Thursday, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. 

Prices will fall by another 10–20 rupees per 100 kg in the coming days, Kuvadia said.

The following are the highlights of the sugar trade in the domestic market today:

-Down by 5 rupees per 100 kg at 3,720-3,800 rupees per 100 kg in Kolhapur

-Down by 5 rupees per 100 kg at 3,862-3,972 rupees per 100 kg in Mumbai

-Down by 10 to 15 rupees per 100 kg at 3,770-3,890 rupees per 100 kg in Muzaffarnagar

-Down by 10 to 15 rupees per 100 kg at 3,770-4,000 rupees per 100 kg in Kanpur

On the Intercontinental Exchange, the March sugar contract was at 23.17 cents a pound, up 0.6% from the previous close.

Sugar prices rose on the Intercontinental Exchange, tracking a rise in crude oil prices. Sugarcane is used for the production of ethanol, which is used as a biodiesel mix.  

Strength in crude oil prices encourages mills to divert more sugarcane towards the production of ethanol, which decreases the supply of the sweetener in the market.  End

US$1 = 83.39 rupees

Edited by Vidhi Verma

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