Sugar Quota Swapping Led To Price Fall In Delhi, Kolkata, Market In Balancing Mode

NEW DELHI (Commodities control) Sugar prices eased down in Uttar Pradesh, Delhi and Kolkata but gained in Mumbai. Trade sources defined the movement as internal balancing of sugar supplies after permission of swapping of export and domestic sale quota. In the words of a Delhi based trader, exportable sugar was diverted to domestic market so the prices crashed in north and east India.

As per trade sources, the government had given permission for swapping of domestic sale quota and export quota between sugar mills in last month. The government releases monthly sale quota for every sugar mill as per possible demand so the prices can be stabilized. It had also released quota for subsidized sugar export. But sugar industry had requested to permit for quota swapping as the prices were under pressure in some regions compare to other regions. The government had accepted their demand as it found ok to balance supplies in all the regions. Total quantity of export and domestic sale will not alter with the system.

As per market sources, domestic quota shifted from Maharashta to Uttar Pradesh. Therefore sugar price came under pressure from last Saturday. A trader from Delhi told that millers are accepting lower supply orders from small traders and are supplying to their door step on free of cost. Wholesalers have apprehensions that they will fact problem to sale their stocks with such move of mills. Millers were aggressively selling sugar in UP, Delhi and Kolkata markets after such swapping. Today, millers have reduced their selling prices by Rs. 20-30 per quintal so market prices crashed up toi Rs. 70 per quintal in UP and Delhi. The prices slipped up to Rs. 20 per quintal in Kolkata. However, the prices were not under pressure in western and southern markets.


Under swapping system, millers of these regions got additional export quota so extra sugar will be diverted to foreign market. According to an expert from Hyderabad, the demand was average so the prices remained stable in market. The prices found support in Mumbai Vashi market and increased Rs. 10 per quintal.