Pune: Sugar prices have gone up about 7% in just over a week, an escalation attributed by analysts to more than 25% slide in output in India’s top producing state Maharashtra from the previous year. The ex-mill price of S-30 grade sugar in Maharashtra has increased to .₹ 36.50 per kg from about .₹ 34.20 per kg.
“Increase in demand from everywhere in the country and the figures of steep fall in Maharashtra’s sugar production are currently driving the prices up,” said Ashok Jain, president, Bombay Sugar Merchants’ Association.
The spot price of M30 grade sugar on NCDEX for delivery in Delhi increased to .₹ 38.70 per kg on January 3 from .₹ 37.50 per kg on December 23.
As per an estimate of the Indian Sugar Mills Association (ISMA), the country’s sugar production till December 31, 2016 was up 0.4% from the previous season despite the 25% shortfall in Maharashtra’s output. That’s partly because the sugar production in UP surged 50% from the previous season during this period. ISMA said during the first three months of the current season, October-December 2016, there has been a fall in sugar offtake.
“With weddings and celebrations at low key, and consumption of sugar sweetened products being lower due to lower availability of currency, there has been a demand destruction of almost 5 lakh tonnes of sugar. The offtake in October-December 2016 has therefore been significantly lower than last year,” ISMA said. Sugar prices move up by about 7% within a week ISMA says cost of production at 36/kg is more by 2/kg Industry demands restructuring of all outstanding long-term