Sugar prices reach record high in three weeks – Dainik Savera Times

New Delhi: Domestic sugar prices are rising and are expected to remain high for 2-3 months. Local sugar prices have reached record highs in the past three weeks. This is due to concerns over production as well as fragile balance sheet (estimated to be 6 million tonnes of closing stock on September 30 – barely enough for two months’ consumption in the festival months) and delays. JM Financial Institutional Securities said in a report that this was due to the delay in festivals (hence availability of labour) and efforts by mills to optimize recovery levels from the beginning of the crushing season till late November (usually mid-October). Will remain.

India has been one of the world’s leading exporters for three years running and global sugar prices have hit a 12-year high on concerns over India’s sugar production estimates and the possibility of negligible/zero exports. But given the lack of exports, this does not help local producers much, the report said. Also, given the lack of any imports, local prices have no direct/indirect relationship with global prices, and the government influences local prices through its monthly release mechanism measure.

Sugar production estimates in India are at risk of downside: Early last month, the Indian Sugar Mills Association (ISMA) gave a preliminary sugar production (net) estimate of 31.7MNT for SS24 (Oct 23-Sept 24). But, Aug23 has been a dry period across the country, especially in the states of Maharashtra and Karnataka (these two states account for 45-50 per cent of India’s production), posing a threat of further cuts to production estimates.

‘We estimate sugar production in India for SA24E (net production, after diversion of 4.5 million tonnes) to be 30 million tonnes. We note that Uttar Pradesh, despite seeing dry weather in August, is not affected in the monsoon due to significant irrigation thanks to the rivers. “We see significant optimism returning to the sugar sector due to rising concerns over seasonal factors (festive period and hence rise in sugar prices) and India’s sugar production estimate for the upcoming season (SS24E).

“In our view, India’s production could be around 30 million tonnes (+/- 1 million tonnes), which is higher than the domestic consumption of 28-28.5 million tonnes,” the report said. So, the situation is comfortable, export announcement, if any, will come only after May 2024 (once the season is over), global prices have reached record highs, but there is no significant impact on domestic sugar prices Sugar prices, which have risen sharply in the past three weeks, will remain stable, although the government will cap any sharp increase. The increase has also impacted food inflation besides impacting the impending state/general elections.

V.K., chief investment strategist at Geojit Financial Services. Vijayakumar said that since there is global consensus on sustainability and renewable energy, the proposed biofuel alliance is likely to be taken seriously at the G20 summit. Since India is the second largest producer of sugar after Brazil, the Indian sugar industry will benefit from the decision to increase ethanol blending with petroleum products. Sugar prices have increased by about 3 percent in the last one month, which has improved the prospects for sugar companies. But the good news is already that many Chinese stocks are trading at 52-week highs, he said.