Indian Sugar Prices Rise As Production Drops Amid Record High Demand

According to industry officials, sugar prices in India have increased by over 6% in two weeks, and this trend is expected to continue due to the anticipated decrease in production and heightened demand from bulk consumers during the summer season.

Sugar makers such as Balrampur Chini, Shree Renuka Sugars, Dalmia Bharat Sugar, and Dwarikesh Sugar may benefit from higher local prices, allowing them to make cane payments to farmers on time.

 However, this increase in prices may exacerbate food inflation and prevent New Delhi from allowing additional sugar exports, which could further support already high global prices. The rise in sugar prices is mainly due to the reduced production in Maharashtra, the leading sugar-producing state, with dealers estimating a decrease from the earlier forecast of 13.7 million tonnes to 10.5 million tonnes in the 2022/23 marketing year ending on September 30.

As the demand from bulk buyers is expected to rise due to the summer season, prices are likely to further increase in the coming months. The COVID-19 pandemic disrupted demand last year, but it has rebounded and is predicted to reach a record 28 million tonnes this marketing year, aided by the summer months and wedding season.

The government is not expected to permit additional exports due to the expected decline in the closing stock for the season, which could reach its lowest level in six years, estimated at around 5.5 million tonnes. In the current season, India has only allowed sugar mills to export 6.1 million tonnes, down from a record 11 million tonnes in the previous season.

Also Read: