Sugar NSE 7.07 % prices at mill gates have declined by as much as 5.5 per cent in the past one month due to subdued domestic and export demand, with some grades of the sweetener trading at the government-set minimum selling price of Rs 29 a kg on Wednesday.
"Price of the S-30 grade sugar has fallen to Rs 29 per kg in Maharashtra this week as demand is tepid. Prices were ruling high before Diwali due to festival season demand," said Ashok Jain, president of the Bombay Sugar Merchants' Association.
The NCDEX spot sugar in the Delhi market has dropped by more than 4 per cent in a month to Rs 31.15 a kg on Wednesday. The spot price in Maharashtra’s Kolhapur has eased to Rs 29, a fall of 5.5 per cent compared with Rs 30.72 on October 29.
Demand has declined as winter is setting in when sales of ice-cream and cold drinks, among the largest sugar consuming segments, reduce, traders said. Another reason for the downward trend in prices is the slow pace of exports.
India has a target to export 50 lakh tonnes of sugar in 2018-19. But Jain said shipments, especially of white sugar, were slow. “Mills will have to focus on raw sugar to boost exports," he added.
India is looking at a surplus sugar production in 2018-19, though the Indian Sugar MillsNSE 1.47 % Association has reduced its production estimate by 11.26 per cent to 315 lakh tonnes.
The country’s annual sugar consumption is 255-260 lakh tonnes. Its output in 2017-18 was 322.5 lakh tonnes.
“Sugar millers from Maharashtra are not coming forward to sign export deals for various reasons like sugar being mortgaged with the lending banks and the possibility of a fall in sugar production,” said Vijay Autade, an independent sugar expert from Maharashtra.
The industry is waiting for big government-to-government sugar export deals, especially with countries like China, Thailand and Malaysia. Indian sugar industry sources said a Chinese delegation would likely visit India next month to explore sugar imports from here, even as China is engaged in a trade war with the US, one of its suppliers.
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Source: Economictimes
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