The ex-factory sugar prices have moved up by close to a tenth after the government allowed exports of 1 million tonnes of the sweetener recently. At the same time, the global sugar prices have eased following India’s decision to allow the shipments.
The ex-factory prices, which were ruling around ₹33-34 per kg levels last week before the announcement have now moved up to ₹37 per kg levels. “With the recent announcement of the government to allow one million tonnes of sugar export, there has been a very substantial jump in the sugar price. The prices are up by almost ₹3 per kg in the domestic market since then. The export prices are another ₹2 higher than that. If prices stabilise at these levels, it will be good for the industry,” said Mukesh Kumar, Executive Director, Vishwaraj Sugar Industries Ltd.
The prices for the export market at the ex-factory levels are hovering in the range of ₹38-40 per kg. “Sugar prices may stabilise at these levels and are unlikely to go southwards,” Kumar said.
Abhijit Ghorpade of Ghorpade Agrovet, a broker in Kolhapur, said there has been a ₹3-3.5 per kg increase in the domestic market. “Millers are in no mood to sell at current prices for export and are expecting over ₹4,000 per quintal for the exports. As a result, no trade has taken place for exports. At present, the global market is not supporting the prices. Millers have to wait for some recovery in the global market, which is likely to happen over the next 3-4 weeks ahead of demand for Ramadan,” Ghorpade said.
- Read also: India allows 1 mt sugar export amid limited surplus
After India announced the plans to allow sugar exports, the international prices have come down.
“Ever since the announcement was made by the Food Secretary in the second half of December, that the Government of India was contemplating to allow exports, the global prices have been on a downward trend since then,” Kumar said.
The global sugar prices are down by around 8 per cent on a monthly basis, and lower by some 24 per cent on year-on-year basis.
Kumar said the move to allow exports will benefit the industry tremendously. “If another 1 million tonnes is given further for exports, that will be really excellent for the industry,” he added.
Meanwhile, sources said sugar prices have witnessed a dip of ₹50 per quintal today as traders have offloaded their stocked sugar in the market, taking advantage of the recent price hike.
As per government estimates, sugar production in the current 2024-25 season starting in October is estimated to be 32 million tonnes, whereas the domestic consumption is 28.5-29 million tonnes with some 4 million tonnes diverted to ethanol.