Sugar

Prices of sugar rose in the key wholesale markets of Mumbai due to an increase in demand as Maharashtra markets opened after a three-day holiday. Prices of the sweetener, however, fell in the key wholesale markets of Delhi as demand was hit due to police blockades set up in Punjab and Haryana to quell unrest ahead of the announcement of the sentence against self-styled godman Gurmeet Ram Rahim.

The domestic demand for sugar may rise to about 30 million tonne by 2020, up from an estimated consumption of 24.5 million tonne this year. In order to meet the demand of 30 million tonne, the country should record a growth of 3.75% per year in the production of the sweetener.

Prices of sugar fell in the key wholesale markets of the country due to increased selling pressure on mills. Prices of the commodity have declined due to increased selling pressure on mills as the government has imposed stockholding limits on them. The government has imposed stockholding limits on sugar mills for September and October to keep prices in check ahead of major festivals.

The Directorate General of Foreign Trade has reallocated quota for the import of 92,660 tonne raw sugar at 25% duty. Subsequent to the allocation of quota for import of sugar on Sep 13, nine applicants had surrendered their allocated quota. Some sugar mills surrendered their quota as the quantity allocated to them was very low and imports would have be unviable. The Directorate General of Foreign Trade had received a total of 35 applications for import of raw sugar, much higher than anticipated.

Futures contracts of sugar 11 fell to a one-month low of 13.11 cents a pound on the ICE due to a higher-than-expected rise in the output of sugar in the Centre-South region of Brazil. The October contract of sugar 11 ended at 13.21 cents a pound, down 3.9%, while the most active March futures closed 3.1% lower at 13.91 cents a pound.

Mills in Brazil’s Centre-South region produced 3.13 million tonne of sugar in the first fortnight of September, up 29.2% from 2.42 million tonne produced a year ago. Centre-South Brazil accounts for over 90% of the country’s total sugar output. Mills in the region crushed 45.44 million tonne of cane during Sep 1-15, up 20% on year. During Apr 1-Sep 15, mills crushed 427 million tonne of cane, down 1.6% on year. During the same period, mills produced 26.39 million tonne sugar, up 5.9% on year. Of the total cane crushed, around 48.4% was used for sugar production, while 51.6% was used to make ethanol. Mills in the region are likely to produce 35.2 million tonne of sugar this season, marginally lower than 35.6 million tonne produced in 2016-17 (Apr-Mar).

Owing to a sugar shortage in the country, the government had planned to start the crushing of sugarcane ahead of the normal schedule- before Diwali (October 19)- but the delay in the monsoon’s retreat has put paid to this plan. According to the sugar industry, heavy rains are again expected in October in Karnataka and Maharashtra- states where the cane crushing starts first- due to the lingering monsoon. It means labourers cannot access the cane fields as they will be muddy during this period. The National Federation of Cooperative Sugar Factories (NFCSF) has said that the crushing could start from November. There is heavy rain in Karnataka and Maharashtra. Its occurrence in October also will make it impossible for labourers to go into the fields. Due to this, the crushing work is expected to start only in November. However, in case the monsoon recedes completely by mid-October, crushing might start in Karnataka after Diwali. Due to the delay in the monsoon’s retreat, Maharashtra has decided to postpone the cane crushing to November 1.

Sugarcane price fixation sparks row between farmers, millers in Uttar Pradesh.

The prices of sugar fell in the key wholesale markets of the country on Thursday amid increased selling pressure on mills. Prices of medium-grade sugar down rs 5 in the markets of Delhi and Muzaffarnagar, and rs 10 per 100 kg lower in Mumbai and Kolhapur. Millers are quoting lower prices as there is no demand at current price levels despite it being the festival season. Mills also have to adhere to stock limits. The government has imposed stock holding limits on sugar mills for September and October to keep prices in check ahead of major festivals. Sugar mills can hold up to 21 per cent of the total sugar supply of the 201617(October-September) season as of the end of September, and 8 per cent of the supply as of the end of October. Demand for the sweetener has been low since the beginning of the month. Some sugar mills in western Uttar Pradesh are likely to begin cane crushing for 201718 (October-September) on October 10.

Sugar Prices fall on rain forecast for Brazil.

With less than a month remaining for sugarcane crushing to begin in the new season, it’s time for the annual ritual of confrontation between farmers and private millers in Uttar Pradesh on the issue of price to be paid to cane growers. As every year, both the stakeholders hold diametrically opposite views on what should be the “right price” that the farmer should get for his produce. At a meeting of the cane price fixation committee under the chairmanship of Uttar Pradesh chief secretary, the farmers demanded Rs 375-400/quintal while the millers categorically stated that they are in no condition to pay anything beyond last year’s State Advised Price (SAP) of Rs 305 per quintal.

Sugar prices fell Monday amid expectations for greater rain in Brazil in the coming days, adding to concerns about a global glut of the sweetener. Raw sugar for October delivery dropped 1% to 13.84 cents a pound on the ICE Futures U.S. exchange. The precipitation will begin as isolated to scattered showers during the early to middle part of this week and then increase.

U.P. private sugar mills urge govt not to increase State Advisory Price.

Govt sees 24% jump in sugar production to 25 MT in 2017-18.

Apprehending hike in cane prices this season, private sugar mills have petitioned the state government urging it not to increase State Advisory Price (SAP) as ‘it would be detrimental for the industry and cane sector. In a letter despatched to Principal Secretary, Sugar and Cane Development, Uttar Pradesh Sugar Mills Association (UPSMA) secretary general Deepak Guptara said that the present SAP should not be increased in the overall interest of the farmers and the industry. As of now, the SAP stands at Rs 305 per quintal and sources claimed that Yogi Government wants to increase it between Rs 10 and 15 per quintal. The previous Samajwadi Party regime had increased cane price by Rs 25 per quintal last year. Sugar prices are subject to market variations and can go up and down as per demand. Overall increase in sugar prices is marginal as compared to SAP in previous years. There are times when sugar prices go down because of excess production of sugarcane but the SAP increases. This imbalance has hit the sugar industry hard. UPSMA official said that once SAP was increased, it cannot be reduced even when sugar prices fall. In such situation cane price arrears accumulate and sugar mills incur losses.

Delay in monsoon’s retreat postpones sugarcane crushing.

The government is expecting about 24 per cent increase in the country’s total sugar output to around 25 million tonnes in the marketing year beginning next month on likely higher output in Uttar Pradesh and Maharashtra following good rains. This is an initial projection based on the inputs of the state governments. The country’s sugar output in the ongoing 2016-17 marketing year (October-September) is estimated to be lower at 20.2 million tonnes because of poor rains. India is the world’s second biggest sugar producer. In a meeting with state cane commissioners called by the Union Food Ministry, official sources said state governments have submitted the sugar production figures after assessing the likely sugarcane output and recovery level. Based on their inputs, the country’s overall sugar output is expected to be around 25 million tonnes in 2017-18 marketing year,

India spot sugar prices down on selling pressure.