Prices briefly softened after the government imposed stock limits on sugar dealers with effect from July 28, in a bid to temper rates which hit record highs. India was exporting sugar till May 13 amid subdued domestic prices and surplus stocks. This scenario altered in the past month, pushing the government to initiate action.
The hike in one month is sharp at 16.7%, with all-India average prices rising to ₹4,620 per quintal from ₹3,960 per quintal. Lower output and uncertainty about the impact of El Nino on the next two sugar seasons are also weighing on prices, said millers. “The demand for sugar has not been affected due to increase in prices, which will keep prices firm,” said Abhijit Ghorpade, a sugar broker in Maharashtra.
The Centre, which allocates monthly sales quota to each sugar mill, has kept quota for August similar to last year at 2.25 million tonnes.