Sugar prices rose by Rs 50-80 per quintal on market speculation that the government may create a buffer stock of about 30 lakh tonne of the sweetener and fix a minimum price for the sale of the commodity by the mill owners to traders in addition to probably bringing the release mechanism back.
According to Bombay Sugar Merchants Association, Sugar prices have gone up on these market rumours of the possible creation of a buffer stock and fixing of a minimum price for sale of the commodity. Ex-mill Sugar prices on Monday were Rs 2,600-2,650 per quintal for S-30 grade and `2,660-2,750 per quintal for M-30 grade.
Since exports are not viable for millers at present because of the non parity in international and domestic prices, additional measures were required to rein the downslide in Sugar prices, the association said.
At present, the demand in the market is slack with excess Sugar production. Though the government had mandated mills to export 20 lakh tonne, there is still an excess of 50 lakh tonne, according to industry observers.
The slight improvement in prices still does not bring much cheer to Maharashtra mills. This season, Maharashtra has seen a record production of 107.05 lakh tonne of Sugar after crushing some 952.21 lakh tonne of cane at a recovery rate of 11.24%. The production this year beat last year’s record of over 105.14 lakh tonne of Sugar.