Despite low quota, there is no possibility of a sharp jump in sugar

30-Jun-2025 08:38 PM

New Delhi. The Union Food Ministry has fixed a quota of 22 lakh tonnes of sugar for domestic sale in July, which is 1 lakh tonne less than the June quota of 23 lakh tonnes and 2 lakh tonnes less than the July 2024 quota of 24 lakh tonnes.

Usually, a lower quota raises expectations of a price increase, but this time several factors may prevent the sugar market from rising significantly.

In June, around 1.50 lakh tonnes less sugar was sold than the fixed quota. If this unsold stock is added to July’s quota, the total available quantity will reach 23.50 lakh tonnes.

July is the peak monsoon month when rainfall is widespread across the country and temperatures fall. If rainfall is deficient, temperatures may rise again.

The price movement of sugar will largely depend on the purchasing activity of bulk buyers. Currently, the ex-factory price of sugar remains significantly higher than the government-fixed level, and millers are trying to maintain it.

Events like the Kavad Yatra and Muharram fall in July, but they are not expected to significantly boost demand, consumption, or prices.

While a sharp rise in prices seems unlikely, a steep fall is also doubtful. Overall, prices are expected to fluctuate within a limited range, with normal ups and downs of about ₹50 to ₹100 per quintal in the market.

The main season of sugarcane crushing and sugar production has ended, and now a special crushing session is expected in South Karnataka and Tamil Nadu, likely to continue until September.

During this time, about 3.50 to 4.00 lakh tonnes of sugar is estimated to be produced. Although total sugar production has already declined by 18 percent to 261 lakh tonnes, millers do not hold large surplus stocks, so balance in the market is likely to be maintained.