Mumbai: Sugar prices are expected to remain high in the coming months as lower sugarcane acreage and poor rains will keep sweetner's output at 15.3 million tonnes (MT), falling severely short of domestic consumption of about 23 MT in the 2009-10 season, industry officials have said.
Sugar prices at Kolhapur (S-variety), a major trading hub, rose to a record high of Rs 3,972 per quintal last week, due to lower refining, robust demand from stockists as well ice-cream and cold drink makers ahead of summer season. Lower January quota release by government and second-year deficit in demand and supply will add to the uptrend, Bonanza Commodity Assistant Vice-President Vibhu Ratandhara told PTI here.
When the government suspended futures trading in sugar in May 2009 end, the prices were ruling in the range of Rs 2,250- 2,300 in Kolhapur for sugar M200. Sugar prices in the Indian markets have now set a new record, crossing Rs 4,000 per quintal mark, NCDEX Institute of Commodities Market and Research (NICR) Research Associate Ruchi Jain said.
The prices have increased due to a slump in production in 2008-09 season (October-September) and projection of shortfall even this season. The government has decided to extend the ban on futures trading in sugar for another nine months till September 2010, Jain said.
The most bullish factor for all last months rally is that India's current year output is unlikely to meet annual consumption of 23.5 million tonnes, Ratandhara said.
PTI
First Published: Sunday, January 10, 2010, 19:12