Sugar won't taste bitter this festive season

Sweet lovers can heave a sigh of relief as sugar prices are not going to surge this festive season. The ban on sugar exports, a rise in global production and stock clearance by mills ahead of the next sugar season are keeping prices under check.

Normally, sugar prices increase by 10-15 per cent in the run up to the festive season, between September and March.

At present, S30 sugar in Vashi market for mill delivery is quoted in the range of Rs 1,735 to Rs 1,742 per quintal, while that for naka delivery is ranging between Rs 1,810 and Rs 1,825 per quintal.

M30 for mill delivery is sold between Rs 1,755 and Rs 1,785 per quintal, while that of naka delivery is quoted in the range of Rs 1,845 to Rs 1,855 per quintal. In the spot market, S30 variety of sugar is quoted at Rs 1,850 in Vashi, while M 30 variety sugar is sold at Rs 1,880 per quintal.

"Although current prices are on the lower side owing to poor demand, they won't go this festive season," said Ashok Jain, secretary, the Bombay Sugar Merchant Association.

Rajendra Shah, proprietor of Hitendra Kumar Takarshi & Co., one of the leading sugar trader based in Vashi, said prices will stay low till major policy decisions such as opening up exports, compulsory ethanol blending and licensing for 100 per cent ethanol production plant are not implemented.

In the overseas market, sugar prices have fallen from $425 a tonne to $390 per tonne in the last 20 days and the trend is expected to continue in anticipation of bumper sugarcane crop in major producing nations.

"Excessive rains damaged sugarcane crop in a few districts of Maharashtra, including Kolhapur and Satara, but that would again compensate with the bumper crop in south India and Uttar Pradesh," Shah added.

The government has allocated a quota of 14.5 lakh tonne and 13.5 lakh tonne for August and September respectively, which is far ahead of the consumption of about 26 lakh tonne for both the months.

According to industry estimates, the sugar output next sugar season may touch 235 lakh tonnes and even higher if monsoon remains favourable as it is now.

"Sugar mills need to clear stocks and start preparations for the next year. Therefore, sugar mills have come to the market as net sellers. Apart from that stockists have also started releasing their holdings gradually owing to lower price estimates. Hence, net buyers have turned out net sellers now," Jain added.