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India Sugar: Selling pressure, low demand pull prices down in north

Tuesday, Jan 21

 

By Preeti Bhagat

 

NEW DELHI – Prices of medium-grade sugar fell in wholesale markets of north India today because of selling pressure on mills ahead of the month-end and as demand is weak, traders said.

 

In Delhi, prices were 15 rupees per 100 kg lower, and in Muzaffarnagar, they were down 10 rupees.

 

"Demand is not there, yet mills are rushing to liquidate their stocks. More than half of monthly sales quota is still pending for some big groups," said Vijay Kapoor of Muzaffarnagar-based Anshika Sugars.

 

The government had fixed the monthly sales quota for January at 2.20 mln tn.

 

In a major development for the sugar industry, oil marketing companies have floated the second tender for the 2019-20 (Dec-Nov) season for procurement of ethanol. They have invited expressions of interest to purchase around 2.53 bln ltr of anhydrous denatured ethanol from sugar mills for blending with petrol, according to a tender on Bharat Petroleum Corp Ltd's website.

 

Increased diversion of sugarcane towards ethanol would help India reduce the sugar glut in the market. The country is holding record-high carryover stock of 14.5 mln tn sugar for the season that started on Oct 1.

 

Prices were steady in Mumbai and Kolhapur today because of lack of fresh cues.

 

On Intercontinental Exchange Futures-US, the most-active March contract fell 0.3% to 14.41 cents per pound. 

 

"The sugar bears point to the precipitous weakness in the Brazilian Real which seems destined to retest the recent lows and so corroborate arguments of a lean back towards a higher percentage of sugar production (rather than ethanol) in the mix and the lacklustre global growth," Sucden Financial said in a report.

 

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:

 

MARKET

PRICE

CHANGE

Delhi

3,375

(-)15

Mumbai

3,425

0

Muzaffarnagar

3,374

(-)10

Kolhapur

3,465

0

 

End

 

Edited by Vandana Hingorani

 

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This copy was first published on the Cogencis WorkStation

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