Prices of sugar rose in key wholesale markets due to renewed demand from bulk buyers amid expectations that the Centre may raise the minimum support price of the sweetener to 3,200 rupees per 100 kg from the current 2,900 rupees. Medium-grade sugar was sold at 3,420 rupees per 100 kg in Mumbai, up 40 rupees from previous day. In Kolhapur, Maharashtra, it was quoted 20 rupees higher at 3,200 rupees per 100 kg. Prices also rose in Pune, as well as in Muzaffarnagar. the commodity was sold at 3,330 rupees per 100 kg, up 30 rupees. In Muzaffarnagar, the sweetener was traded at 3,340 rupees, up 20 rupees, while in Delhi, it was at 3,330 rupees per 100 kg, up 50 rupees. More than demand, the market is betting on higher floor price for sugar sales possibly getting nod in the Cabinet meeting next day. Market sentiment improved due to the end of the farmers’ stir in western Maharashtra. after mills agreed to pay the fair and remunerative price for cane in one go, and the state sugar commissioner allowed mills to pay the cane dues in the form of sugar. The decision would help clear sugarcane dues in the state, currently at over 46 bln rupees. prices may remain subdued. But in the near term, the outlook remains bullish as the sugar production is estimated to be low. Reduction in sale quota will also keep the prices higher.

Sugarcane growers in western Maharashtra have suspended their agitation against mills after the latter agreed to pay the fair and remunerative price for cane in one go, against the current practice of part payments. Considering the scarcity of water, it was not appropriate to hold back sugarcane supply. sugarcane farmers in western Maharashtra have been on a stir under the aegis of Swabhimani Shetkari Sanghatana, protesting against partial payments of fair and remunerative prices. This hit the supply of sugarcane in some tehsils such as Jaisingpur, Hatkanangale and Shirol. Incidents of burning and damaging offices of some sugar mills in Kolhapur, Sangli and Satara, which account for 60% of the state’s sugar production, were reported over the weekend.

Around 50 sugar mills in western Maharashtra owe sugarcane dues in the range of 2,600-3,000 rupees per ton, based on recovery. Some mills have already paid 2,300 rupees per tn in the first instalment, almost 80% of the applicable fair and remunerative price. Though mills have now agreed to pay the entire amount in one go, payments could be delayed due to paucity of funds with sugar mills. adding that the proposal to pay the fair and renumerative price in the form of sugar has also been accepted in principle by the state sugar commissioner.

On ICE Futures US, the benchmark raw sugar contract was a tad down at 12.75 cents a pound.