Sugar Stock Price: Sugar Prices Could Remain Firm Despite Export Restrictions | India Business News

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MUMBAI: Sugar prices are expected to remain firm despite New Delhi’s decision to cap exports as stocks are expected to fall to their lowest level in five years amid record shipments and robust local demand, said industry officials told Reuters.
Higher local prices will keep the margins of sugar manufacturers such as Balrampur Chini, Shree Renuka Sugars, Dalmia Bharat Sugar and Dwarikesh Sugar intact and help them make cane payments to farmers on time.
India on Tuesday imposed restrictions on sugar exports for the first time in six years by capping shipments this season at a record 10 million tonnes, down from 7.2 million tonnes last year.
Sugar prices are unlikely to fall due to the restrictions as stocks have run out on robust domestic demand and record exports, said Ashok Jain, president of the Bombay Sugar Merchants Association.
The government estimates that opening stocks of sugar at the start of the new marketing year on October 1 could fall to 6.2 million tonnes, which would be the lowest in five years.
Sugar prices in Mumbai have only fallen by 0.3% since the government announced the restrictions.
“The mills are not under pressure. This year, consumption has increased due to strong demand from ice cream and cold drink makers,” Jain said.
The consumption of cold drinks and ice cream, and hence the demand for sugar, increases in India during the summer months which run roughly from March to June.
This year, ice cream sales have jumped due to the heat wave, according to the Indian Ice Cream Manufacturers Association.
Sugar consumption in the 2021/22 marketing year ending September 30 could jump 5% to a record 27.8 million tonnes, according to government estimates.
During the December quarter festivals, sugar prices could rise if the country receives below normal monsoon rains, a trader based in Kolhapur in Maharashtra has said.
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