Wholesale prices of sugar rose in Mumbai and Delhi as the market continued to speculate on a likely hike in the sweetener’s minimum selling price to 3,200 rupees per 100 kg. The Centre had set minimum selling price for sugar mills at 2,900 rupees per 100 kg, but has been facing pressure from various state governments to hike the price amid mounting cane dues. Medium-grade sugar was sold at 3,330 rupees per 100 kg in Mumbai, up 30 rupees from previous day. In Delhi, the sweetener was sold at 3,125 rupees per 100 kg, up 25 rupees.
In Kolhapur, Maharashtra, sugar was sold 20 rupees higher at 3,100 rupees per 100 kg. Prices rose in Kolhapur also due to good demand from stockists. sugar mills in Maharashtra have paid over 32 bln rupees to farmers in the past week towards the fair and remunerative price for the current season after the state sugar commissioner threatened to seize stocks with mills if cane dues were not cleared. In Muzaffarnagar, sugar traded steady at 3,305 rupees per 100 kg. The trend remains bearish for sugar due to higher output data.
sugar sale quota in February to 2.1 mln tn, slightly higher than the 1.85 mln tn in January, so that the mills can pay dues to farmers on time. Mills in India produced 18.5 mln tn of sugar during Oct-Jan, up 8.2% from the previous year. Output, so far, is higher from last year as mills started crushing operations early this year. The front-month March raw sugar contract on the Intercontinental Exchange was at 12.84 cents a pound, down 0.1% from the previous close.