India Sugar: Down in most mkts as demand weak; ICE up post 8-wk low

March 3, 2020
Cogencis |

NEW DELHI – Prices of medium-grade sugar were down in most wholesale markets of India today as demand remained weak even as summer is around the corner, traders said.

Typically, demand for the sweetener increases the during summer season as soft drink and ice-cream manufacturers step up their purchases.

World Health Organization guidelines recommend adults and children limit their intake of free sugar to less than 10% of the total energy intake, while promoting a further reduction to 5% or around 25 gm or 6 teaspoons per day.

On Monday, an official with Coca-Cola India said the company would cut down on sugar content below 6 grams in the next two years in its beverages, various media reports said. 

"Right now, there is nothing to speculate in the market. Production numbers are in front of us, export is seen over 5 mln tn, March sales quota is 2.1 mln tn and is quite reasonable, we know what's going to happen. Market rises on speculation and not demand and supply," an official with a leading Mumbai-based mill said.

Today, Indian Sugar mills Association said mills in India produced 19.48 mln tn of sugar during Oct-Feb, down 21.8% on year. Of the 453 mills that had started crushing cane on Oct 1, 68 mills ended their crushing operations as on Feb 29.

On the export front, mills have so far signed deals to export over 3.5 mln tn sugar and have shipped out about 2.2-2.3 mln tn of the sweetener, ISMA said.

Mills are also looking to export sugar to Indonesia due to shortage in their local market. The Food Resilience Agency has proposed to import 130,000 tn of white crystallised sugar, reports said.

The most active May raw sugar contract on the Intercontinental Exchange Futures US was up 0.14% from the previous close at 13.83 cents per pound. On Monday, the contract fell to an eight-week low of 13.77 cents.

"We believe the fundamentals still point to stronger prices but have to admit to our confidence being shaken…we believe that once the coronavirus crisis abates, sugar will resume its upwards course and this might happen quickly. We would favour running long," Sucden Financial said in a report.

Following are today's ex-mill prices of medium-grade sugar in rupees per 100 kg, at key wholesale markets, and the change from the previous close: