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Domestic Sugar Prices Remain Steady On Routine Demand

11 Jan 2019 2:50 pm
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NEW DELHI (Commoditiescontrol) - Domestic sugar prices ruled mostly stable at major markets in the country on Friday amid routine demand.

In Mumbai, prices were at Rs 3,042-3,102 a quintal for S-grade and at Rs 3,060-3,232 for M-grade, as per Bombay Sugar Merchants Association. 

The market sentiment is largely based on whether the government will hike the minimum selling price or not. There may be some improvement in demand in the days to come due to festivals of harvest, i.e. Makar Sankranti, Lohri and Pongal in many states.

Prices may also rise towards the end of this month, as the government capped sales by mills at 1.85 million tonnes for this month, lower than the monthly demand of around 2 million tonnes.

Furthermore, if global prices remain high, exports from India may become economically viable and raise domestic prices. 

However, the strengthening rupee is making shipments unattractive despite a government push for overseas sales. The Rupee has risen 5.5 percent from a record low of 74.48 against the US dollar in October, denting mills’ margins from overseas sales.

So far, Indian mills have signed contracts to export up to 1.5 million tonnes of the commodity this season, compared with a target of 5 million tonnes.

Meanwhile, Indonesia, the world's second-largest sugar importer has signalled that it is likely to lower duty on raw sugar imports from India to bring it at par with Australia and ASEAN countries in return for reducing duty on palm products shipments.

“We’re open to” India’s demand, Indonesia’s Trade Minister Enggartiasto Lukita says in Jakarta Thursday. Indonesia govt will soon meet India govt to further discuss this, he said further.

Indonesia levies a 10 percent import duty for Indian sugar vs 5 percent for shipments from Australia and Thailand. 

After producing a record 32.5 million tonnes in 2017/18, India is likely to produce 31.5 million tonnes to 32 million tonnes of the sweetener in 2018/19, more than local demand of around 26 million tonnes.

(By Commoditiescontrol Bureau) 

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