PUNE: Industry body Indian Sugar Mills Association slashed its sugar production estimate by 9 per cent from its September estimate and sugar prices are expected to rise by about 7 per cent to 8 per cent. However, sufficient availability of sugar for domestic demand and fear of government action are likely keep sugar prices on a leash.
“The lowering of the sugar production estimate can lead to increase in ex-mill sugar price in Uttar Pradesh to Rs 39kg from the current level of Rs 38 kg. However, increase in prices will be limited by adequate availability of sugar in the country and fear of government taking adverse action,“ said Sabyasachi Majumdar, head, Corporate Rating, ICRA.
Trade sources, who did not want to be identified, said the government had arrived at a figure of 20.3 mt sugar in its meeting held with the state cane commissioners on Tuesday. However, government sources said sugar production was going to remain at 22.5 lakh tonnes, same as earlier estimates.