Sugar

Prices of sugar fell in the key wholesale market of Kolhapur, as implementation of a stockholding limit on mills dampened sentiment. As the stock limits are going to come into effect, mills are quoting lower prices to offload their stocks.

Cooperative sector sugar mills across the country have stated that the impact of the stock limit will dampen the cooperative sugar sector. The National Federation of Cooperative Sugar Factories (NFCSF) has expressed concern that the decision to impose stock limits is likely to result in dropping the ex-mill realization below the current levels of Rs 3,650 per quintal in addition to GST and this may adversely affect the timely cane payment to farmers across the country. The food ministry has imposed limits on stocks sugar mills can hold during September and October, in a bid to discourage hoarding and curb any potential price rise during the festival season.

Large sugar mills in Uttar Pradesh have decided to begin crushing in October this year, almost a month ahead of schedule, to boost supply of the sweetener and control shifting of cane supply to jaggery and khandsari units. The commencement of crushing in October is set to benefit the mills, the government, and consumers alike, as it would help control shifting of cane supply to jaggery and khandsari units (kolhus), especially in western UP. In absence of procurement of sugarcane from the mills, small and marginal farmers in UP supply their produce to kolhu to fetch instant cash. With early start, the mills start generating early revenues also.

The government-run National Sugar Institute (NSI) has filed an application for patent rights for its innovative technique to develop bio-detergent from bagasse, the residue left after the extraction of juice from sugar cane. Since no chemical was used in preparing the detergent powder from bagasse, it was safe for skin and environment because it did not discharge any harmful waste. Use of bagasse for detergent has now provided a fresh option of earning.

Prices of sugar fell in the key wholesale markets of Mumbai as implementation of stock-holding limit on mills dampened the sentiment. Sugar stocks in north India are already quite low. Stock limits would ensure slower release by the mills now. The government has imposed stock holding limits on sugar mills for September and October. Sugar mills can hold up to 21% of the total sugar supply of 2016-17 (Oct-Sep) season as of end of September, and 8% of the supply as of end of October.

Mills in Brazil’s Centre-South region produced 3.16 million tonne of sugar in the first fortnight of August, up 6% compared with 2.98 million tonne in the year-ago period. Centre-South Brazil accounts for over 90% of the country’s total sugar output. Mills in the region crushed 45.29 million tonne of cane during Aug 1-15, up 0.3% on year. The Centre-South region also produced 13.52 bln ltr of ethanol during the period, compared with 14.82 bln ltr in the year-ago period. Of the total cane crushed, around 48.7% was used for sugar production, while 51.3% was used to make ethanol. Mills in the region are likely to produce 35.2 million tonne of sugar this season, compared with 35.6 million tonne in 2016-17 (Apr-Mar).

Futures contracts of raw sugar on ICE fell due to higher output of the sweetener in Brazil. The most-active October contract was down 0.6% at 13.74 cents per pound.

The government has imposed stock holding limits on sugar mills for the months September and October. Sugar mills can hold up to 21% of the total sugar supply of 2016-17 (Oct-Sep) season as of end of September, and 8% of the supply as of end of October. Paswan also said that there is no shortage of sugar for domestic consumption. Stock limit has been introduced to keep prices of sugar in check with a slew of festivals lined up for the next few months

Prices of sugar fell in the key wholesale markets of the country as implementation of stock holding limit on mills dampened the sentiment for the commodity. Government has imposed stock holding limits on sugar mills for September and October. Sugar mills can hold up to 21% of the total sugar supply of 2016-17 (Oct-Sep) season as of end of September, and 8% of the supply as of end of October.

Uttar Pradesh government is likely to keep the administered price of cane for 2017-18 (Oct-Sep) unchanged at 305 rupees per 100 kg. It is most likely that the state-advised price for sugarcane will not be raised for 2017-18. Reduction in price is anyway not possible as it would clash with farmers’ demand for higher prices. In 2016-17, Uttar Pradesh had raised the administered price of cane by 25 rupees per 100 kg to 305 rupees after keeping it unchanged for three years. The state government is likely to continue with its sugarcane pricing policy for at least two more years, a senior official from the state cane department had said earlier this month.

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.

Sugar prices extended their revival, returning above 14 cents a pound at one point, after Brazil unveiled a 20% tax on Brazil ethanol imports, in the latest of a series of moves by the top producing country of the sweetener deemed potentially positive for values. Raw sugar futures for October stood 2.1% higher at 13.95 cents pound in midday deals in New York, taking close to 8% the contract revival from a mid-month low. Earlier the contract touched 14.06 cents a pound.

US ethanol market participants and trade groups decried the Brazilian government decision to levy a 20% tariff on ethanol imports above 600 million liters. Brazil, the second largest ethanol producer in the world, began importing large volumes of ethanol in 2016 as high sugar prices made the sweetener more attractive to sugarcane mills than ethanol. Through June, the US exported over 1.045 billion liters of ethanol to Brazil. That could mean that any further exports to Brazil would be subject to the 20% tariff. But it does not appear that exports from earlier this year above the 600-million-liter level would be affected by the tariff.

Sugar market witnessed higher volume almost double at mill level at steady prices as stockiest gave fresh orders to meet higher physical demand for 11 days long Ganeshotsav starting. At Vashi prices remained unchanged despite higher arrivals and local dispatches.