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India Sugar: Down in north India on weak demand; exports cap loss

Monday, Feb 17

 

By S. Anirudh Iyer

 

NEW DELHI – Prices of medium-quality sugar in north India fell today because of weak demand from bulk buyers and also as higher crushing of cane in Uttar Pradesh mills increased supply in the spot markets, traders said.

 

In Delhi, prices fell by 10 rupees per 100 kg and in Muzaffarnagar by 20 rupees. 

 

Crushing in Uttar Pradesh is going on in full swing because of abundant supply of cane. In the ongoing season, mills crushed 59.77 mln tn cane to produce 6.5 mln tn sugar as of Friday at a recovery rate of 11.00%, data from Uttar Pradesh Sugar Mills Association showed.

 

A steep fall in prices was cushioned due to exports of the sweetener following higher price in the international market. Sugar prices in the international market are hovering at multi-year highs. 

 

On Intercontinental Exchange futures US, the most-active March contract touched a nearly three-year high of 15.90 cents per pound on Wednesday because a drought in Thailand lowered the sugar output in the country. Thailand is one of the major producers of sugar in the world. ICE futures US was closed today on account of President's Day. On Friday, the March contracts on ICE futures had closed at 15.06 cents per pound.  

 

"Thailand really is a disaster, and will probably be as bad next year. The ratoon cane and the cane planted last year will have suffered from the drought; the cane to be planted in the coming weeks will need a lot of rain; above all our meteorological forecast is for continuing dryness. The OCSB (Office of Cane and Sugar Board) have forecast next year’s cane at 60-65 tn," Marex Spectron said in a report.

 

 

In the season started Oct 1, contracts to export 3.2 mln tn of sugar have been signed so far, of which 1.7 mln tn is likely to be shipped out by the end of this month, according to industry estimates.

 

Following are today's ex-mill prices of medium-grade sugar in rupees per 100 kg, at key wholesale markets, and the change from the previous close:

 

MARKETPRICECHANGE
Delhi3,440(-)10
Mumbai3,6280
Muzaffarnagar3,507(-)20
Kolhapur3,3600

 

End

 

Edited by Akul Nishant Akhoury

 

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