No possibility of sharp rise or fall in the domestic market price of sugar

27-Jun-2025 10:44 AM

New Delhi. During the current month (June), sugar sales in the domestic market have remained weak, primarily due to reduced industrial demand caused by increased monsoon activity.

The government had set a quota of 23 lakh tonnes of sugar for domestic sale in June, but only around 21.50 lakh tonnes are expected to be sold by the end of the month. As a result, an outstanding quota of 1.50 lakh tonnes may be carried over into July.

Meanwhile, the Central Food Ministry has set the domestic sale quota for July at 22 lakh tonnes. If the unsold stock from June is added, the total availability for July will increase to 23.50 lakh tonnes. July is traditionally the month of highest rainfall in India, with the monsoon active across most regions.

Due to reduced heat and increased rainfall, industrial demand for sugar is also expected to remain subdued during this period.

Interestingly, in July 2023 and 2024, the government had fixed the free sale quota of sugar at 24 lakh tonnes. In contrast, the July 2025 quota has been reduced by 2 lakh tonnes to 22 lakh tonnes. In theory, a lower quota should push sugar prices upward.

However, due to the surplus stock and weak demand, a significant price increase appears unlikely. Millers are unlikely to reduce ex-factory prices, as it would affect their margins, while bulk buyers may be hesitant to purchase at higher rates.

This is because they must keep prices of their end products—ice cream, cold drinks, sweets, etc.—stable to maintain demand.

As a result, sugar prices are expected to remain largely stable next month. Currently, the ex-factory price of sugar ranges between ₹3780–4050 per quintal in Maharashtra and ₹3830–4000 per quintal in Uttar Pradesh.

Even though domestic sugar production declined by 18 percent to 261 lakh tonnes in the 2024-25 season compared to the 2023-24 season, prices have continued to fluctuate within a narrow band.