Sugar prices may leave a bitter taste this year
Over the past 4 to 5 weeks, the domestic sugar market has witnessed a notable rise in prices. One of the factors includes a reduction in available inventory at mills.
Get ready to shell out more for your daily sweet experience, with prices of the ‘sweet poison’ likely to rise in the coming days.
Sugar production this year has been on the thinner side, with an expected output of around 30 million metric tonne, 9% lower year-on-year. India consumes around 28.5 million tonne of sugar per year. Earlier, the production was estimated at 31.7 million metric tons, but poor rains in August have forced most experts to temper their expectations.
According to a report by Centrum Institutional Research, it is too early to make precise predictions about sugar production at this stage because of challenges like irregular monsoons and declining yields observed in the previous season.
The report also mentioned how the sugar industry in Maharashtra is facing a challenge due to an anticipated shortage of cane, which is expected to impact the current season's sugar production.
As such, said the broker, sugar prices are likely to remain elevated (From Rs 4,100 to 4,200) during the rest of the financial year.
“Presently, the ex-mill rates for sugar in Maharashtra and Uttar Pradesh stand at Rs3,650-3,700 and Rs3,950 per quintal, respectively. These rates are at multi-year highs and are on par with the export rates observed in FY23.”
Among the factors that are likely to make a bad situation worse are heightened demand during festivals and relatively low levels of sugar stocking within distribution channels. Centrum expects the upcoming season’s projected sugar production could fall within a wide range, spanning from 28.5-31.0 million metric tonne.
Over the past 4 to 5 weeks, the domestic sugar market has witnessed a notable rise in prices.
This surge can be attributed to several factors, including a reduction in available inventory at mills. Other aspects are probably due to the heightened demand because of the ongoing festival seasons which witness a lot of sugary eateries (cotton candy, sugar cane juice, etc.) and finally, the anticipation of a decline in sugar production for the upcoming season.
Thus, in order to ensure sufficient availability of sugar at reasonable prices in the country, the Central Government has decided to collect data of sugar stocks sold to traders/wholesalers other than sugar mills.