NEW DELHI – Prices of medium-grade sugar were up 30 rupees per kg in Kolhapur, Maharashtra, today due to demand during the summer from Gujarat and Rajasthan, traders said. Meanwhile, prices were steady in Delhi and Mumbai due to demand-supply parity.
"It seems that prices will remain flat for sometime now due to the ongoing elections, and since mills are selling at discount to minimum selling price of 31 rupees per kg because everyone wants to dispose their excess stocks," said an official with Bombay Sugar Merchants' Association.
Higher production along with weak exports of the sweetener is also adding to the domestic glut. With the 2018-19 (Oct-Sep) sugar season closing in five months, the government is likely to miss its export target of 5 mln tn due to uncompetitive global prices.
Indian sugar mills had signed export for of 2.2 mln tn as of Saturday, of which mills have shipped out only 1.7 mln tn till now, All India Sugar Trade Association said in a release.
The Indian Sugar Mills Association has estimated sugar production in 2018-19 (Oct-Sep) to be 5.5% lower on year at 30.7 mln tn. Though the overall output is seen lower on year in 2018-19, it would still be the second-highest on record.
Prices in Muzaffarnagar, Uttar Pradesh were unavailable today as the market was shut due to voting for General Elections.
On ICE Futures US, the most active May contract of raw sugar was at 12.78 cents per pound, down 0.2% from the previous close.
"Weather is once again becoming an issue with El Nino increasing rainfall in (centre-south) Brazil but is expected to reduce rainfall in Asia. India's 2019-20 crop may be affected but given the high level of stocks and the current difficulties in exporting, this is likely to have a lesser impact this time round," Sucden Financial said in a report.
"…weather risk increases or a change in the macro environment will be what it takes to shake the specs out of their complacency. In the meantime, we are told it is very hard to sell physical sugar, so we are range bound as a result," it said.
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:
MARKET
PRICE
CHANGE
Delhi
3,290
0
Mumbai
3,302
Kolhapur
3,348
30