With the start of the festive season, some sections of the trader community have begun raising concerns over the possibility of shortage of sugar during the peak festive season. The Indian Suagr Mills Association (ISMA) however maintains that there are sufficient stocks to take the country to the next sugar season with the crushing season likely to commence in October in most cane growing states.
Sugar prices on Friday in Vashi ranged between Rs 3,700-3,825 per quintal plus GST for small grade and Rs 3,030 to Rs 4,020 per quintal in addition to 5% GST. Traders expect the movement to pick up during the Ganesh festival and after this period when peak festive season begins in the country. Senior officials of the Bombay Sugar Merchants Association say that 3-5 lakh tonnes of sugar imports could ease the pressure that may be caused because some pockets of the country such as Tamil Nadu may not have sugar at this point.
However, ISMA says that there is enough sugar in the country. According to market reports, the government is contemplating another round of sugar imports to meet an anticipated high demand during the upcoming festival season.
In the new crushing season, a slight shortage could happen in the market between September and the new season since Maharashtra has little stock in hand as compared to Uttar Pradesh that reported a higher production in the 2016-17 season, said Mukesh Kuvedia, secretary general, Bombay Sugar Merchants Association.
According to traders, sugar prices are likely to remain firm over the next three months on increased festival demand and a supply crunch.
Abhinash Verma, director general, ISMA pointed out that as per figures released by the government the country’s production is likely to touch 203 lakh tonnes and the opening balance will be around 77 lakh tonnes which means 280 lakh tonnes are available apart from the 5 lakh tonnes that have already been imported.
As per figures, the total consumption is likely to be around 244 lakh tonnes and the opening stock in October 2017 is expected to be around 41 lakh tonnes and even if one considers a consumption of 22.5 lakh tonnes during this period, that leaves some 18.5 lakh tonnes in the market, he said.
Verma added that ISMA has been collecting date from four states — Uttar Pradesh, Maharashtra, Karnataka and Gujarat — on the start of their crushing season dates and these states have indicated that crushing will commence in October.
Around 8 lakh tonnes is likely to be produced in October which means approximately 26.5 lakh tonnes would be available for consumption, Verma explained.
Moreover, production would be in full swing and with estimates of some 250 lakh tonnes predicted, some 210 lakh tonnes would be produced during the initial months which means there would be no shortage of sugar, he pointed out. Verma said that if there was shortage in the market, the market would have given out such signals. Retail prices have been flat for the last 12 months in major markets, he said.