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Sluggish demand from bulk buyers weighed on prices of sugar in the key wholesale markets of the country. Prices of medium-grade sugar fell 10 rupees per 100 kg each in Delhi and Muzaffarnagar, and were down 5 rupees each in Mumbai and Kolhapur. Trade is subdued as demand is extremely poor. Buyers are making need-based purchases only, probably in anticipation of a further fall in prices.

The response to the government allowing more import of raw sugar has been robust, with millers having sought to import three to four times the allowed quota. Like last time, govt have received a lot of applications. The quantity applied for is almost three-to-four times the approved quantity of 300,000 tonne. Shree Renuka Sugars and EID Parry have applied for the maximum quantity.

The Maharashtra government may look to revive at least 40 non-functional cooperative sugar mills in the state possibly by acquiring and leasing them out. Government has formed a committee under the chairmanship of State Sugar Commissioner Sambhaji Kadu-Patil to conduct a financial and technical evaluation of the assets of these shuttered sugar factories. The committee has been asked to submit its report before Sep 20. Maharashtra has 175 cooperative sugar factories, out of which 93 are functional, 33 has been already acquired under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and six have been sold by government.

Mills in Brazil Centre-South region produced 2.54 million tonne of sugar in the second fortonneight of August, down 0.5% compared with 2.55 million tonne produced in the year-ago period. Centre-South Brazil accounts for over 90% of the country’s total sugar output. Mills in the region crushed 38.91 million tonne of cane during Aug 16-31, up 0.8% on year. In Apr-Aug, mills crushed 381.52 million tonne of cane, down 3.6% on year. During the same period, mills produced 23.26 million tonne sugar, up 3.4% on year. Mills in the Centre-South region also produced 15.29 bln ltr of ethanol during the period compared with 16.54 bln ltr in the year-ago period. Of the total cane crushed, around 48.5% was used for sugar production, while 51.5% was used to make ethanol.

Futures contracts of raw sugar on ICE rose due to lower output of the sweetener in Brazil. The most-active October contract was up 0.8% at 14.13 cents per pound.

The government is set to import 50,000 metric tons of sugar, in order to control the market and meet shortages in the country. The sugar imported through London based firm ED&F Man Sugar Limited at a rate of $470 with per ton, resulting in a total cost of Tk 211.32 crore. The retail price of sugar has now dropped to Tk56 per kg from Tk60 one month ago, while packed sugar is selling at Tk65 per kg as compared to Tk69 a month earlier. The annual demand for sugar in Bangladesh is at 1.5 million tons. About 7-8% of this is produced by 15 state-run sugar mills, while the rest is imported from the private sector.