Signs of softening in sugar due to sales pressure and weak demand

28-Jun-2024 05:41 PM

New Delhi. Although the Union Food Ministry has reduced the free sale quota of sugar for the month of July to 24 lakh tonnes,

which is 1.50 lakh tonnes less than the June quota of 25.50 lakh tonnes and equal to the quota of July 2024, it has not had any significant impact on the domestic market price yet.

Being the last week of the month, the mills are being forced to sell the remaining part of the quota of the month of June, while no increase is being seen in its domestic and industrial demand.

Good rains in the major sugarcane producing states are giving relief to the crop and the government is confident of better sugar production in the 2024-25 marketing season (October-September).

The industry has a huge stock of sugar lying and despite strong demands with figures, the government is not ready to open sugar exports at least in the current marketing season.

Analysts believe that when the current marketing season ends on 30 September 2024, the industry may have a surplus stock of more than 80 lakh tonnes of sugar.

This stock will have an impact on the next marketing season and the possibility of a sharp rise in sugar prices will diminish. There may be limited volatility in sugar prices in July.