Weekly Review-Sugar

04-Jan-2025 07:07 PM

Sugar prices strengthen due to good buying

The week of 28 December-3 January saw an increase in sugar prices, driven by strong buying activity, particularly from stockists taking advantage of lower prices. This uptick was evident across various regions and types of sugar pricing.

Mill Delivery Price:

  • Eastern Uttar Pradesh: The mill delivery price rose by Rs 35 per quintal, reaching Rs 4000 per quintal for the first time in a while.
  • Western Uttar Pradesh: Prices increased by Rs 25 per quintal.
  • Punjab: A significant jump of Rs 60 per quintal.
  • Madhya Pradesh: The price strengthened by Rs 65 per quintal.
  • Bihar: Prices grew by Rs 51 per quintal, with the price range remaining at Rs 3870/4011.

In Gujarat, the mill delivery price of sugar grades went up by Rs 60-80 per quintal, reaching Rs 3501-3751 per quintal. The government's fixation of a free sale quota of 22.50 lakh tonnes for January 2025 likely had a role in the price increase. However, production is expected to be lower than last season, which, coupled with declining stocks, is a contributing factor to the price rise.

Spot Price:

  • Delhi: The spot price rose by Rs 10, reaching Rs 4060-4260 per quintal.
  • Indore: The price increased by Rs 60, reaching Rs 3830-3930 per quintal.
  • Chhattisgarh (Raipur): The spot price saw a decline of Rs 10-15, settling at Rs 3740-3850 per quintal.
  • Kolkata: Sugar traded at Rs 3880-4100 per quintal.

Mumbai Market:

  • The price in the Mumbai (Vashi) market went up by Rs 50, reaching Rs 3580-3780 per quintal, while the Naka port delivery price rose to Rs 3530-3750 per quintal.
  • The Maharashtra tender price increased by Rs 30-35, reaching Rs 3435-3620 per quintal, while in Karnataka, it surged by Rs 130 to Rs 3470-3640 per quintal.

Production Outlook:

Sugar production in major producing states like Maharashtra, Uttar Pradesh, and Karnataka has notably decreased during the first quarter of the current marketing season compared to the previous one. This decline in production, alongside lower stocks, is expected to keep the market prices elevated.

Overall, these price hikes reflect a combination of reduced production, stockist activities, and the government's strategic release of a free sale quota, all contributing to a tighter domestic sugar market.

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