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Weakness Continues In Sugar Prices

6 Dec 2018 6:15 pm
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NEW DELHI (Commoditiescontrol) - Sugar prices in the national capital on Thursday softened further amid sluggish demand from bulk buyers and increased selling by mills as cane crushing operations for the season have gathered pace.

Following are today's quotations (in Rs per quintal)

Sugar ready: M-30 Rs 3,185-3,375, S-30 Rs 3,170-3,335

Mill delivery: M-30 Rs 2,995-3,215, S-30 Rs 2,970-3,175

Marketmen said as more and more mills have started crushing cane, there is pressure on mills to sell because they have to make payments to farmers. As on November 30, 415 sugar mills across the country were crushing cane, compared with 450 mills a year ago.

While, domestic demand has declined as winter is setting in when sales of ice-cream and cold drinks, among the largest sugar consuming segments, reduce.

India's sugar production increased by 1.5 percent to 39.73 lakh tonnes till November 30 of the current marketing year that started in October month, industry body ISMA said on Tuesday.

"Crushing operations in all the other States have also begun and slowly and slowly the pace of crushing is picking up," ISMA said in a statement.

Sugar production stood at 39.73 lakh tonnes as on November 30, 2018 compared to 39.14 lakh tonnes as on November 15, 2017, it added.

Due to late start of crushing this year, sugar mills in Uttar Pradesh have produced 9.5 lakh tonnes of sugar till November 30, 2018 as against 13.11 lakh tonnes produced till November 15 last year.

In Maharashtra, however, sugar output rose to 18.05 lakh tonnes, 21 percent higher than the sugar production of last year on the same date. Sugar production in Karnataka slightly moved up to to 7.93 lakh tonnes as compared to 7.02 lakh tonnes.

The overall sentiments are likely to remain bearish in the short-term as mills are now desperate to flush out last year's stocks after the start of new crushing season. But, the medium to long term outlook is positive amid fall in production in India and Brazil.

ISMA has pegged India's sugar output at 31.5 million tonne in 2018-19 season as against 32.5 million tonne in the last sugar season.

The total availability of sugar would be 42.7 million tonnes during 2018-19 as against the annual domestic demand of 25.5-26 million tonnes. Even if mills export 4-5 million tonnes of sugar, the closing stock would be significantly high at 11-13 million tonnes.

Meanwhile, the government has restricted sugar sales by mills in the country at 19.5 lakh tonnes for December, in a bid to trim supply in the market.

During the last two months, the government had announced a higher quota of 22 lakh tonnes each in anticipation of higher demand in the festival season.

In December, "sugar mills having distilleries with ethanol production capacity which divert B-heavy molasses to produce ethanol and thereby sacrifice sugar, shall be eligible to sell additional quantity of sugar in addition to the quantity of white/refined sugar prescribed for domestic sale", the government said.

Globally, mills in Brazil’s centre-south region produced 880,000 tonnes of sugar during the first fortnight of November, down 29.9 percent from 1.26 million tonnes produced in the year-ago period, the country’s sugarcane industry association, known by its Portuguese acronym UNICA, said in a report.

(By Commoditiescontrol Bureau)

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