Sugar price dips as sales quota for Nov likely to rise

mcx servicePrices of Sugar fell in the key wholesale markets of the country as the government is likely to announce a higher sale quota for November.

Mills from Maharashtra had requested the government to give a higher quota to enable them to clear inventories. So, they are expecting quota for November to be more than 2.2 million tonnes (mln tn).

The government has imposed a cap on monthly sale of Sugar by mills to regulate supply in the market and boost prices. For October, the government allocated a total of 2.2 mln tn for sale in local markets.

The downward revision in Sugar production estimate for 2018-19 (Oct-Sep) by the Indian Sugar Mills Association also weighed on prices.

Earlier this week, ISMA scaled down its forecast for the country’s Sugar output in 2018-19 to 31.5-32.0 mln tn from 35.0-35.5 mln tn projected earlier, as the cane crop in key producing states was hit by adverse weather conditions.

Diversion of cane towards ethanol was also a key factor for the downward revision in estimate. The Sugar production estimates for 2018-19, after considering this (Sugarcane) diversion to ethanol.

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