Sugar price across the country hit the highest in seven years following higher physical demand from stockists and lower production rate.
The benchmark Sugar M 30 variety closed on Tuesday at Rs 39.35 per kg. The price has jumped by over 3 per cent in the last 10-days, Business Standard reported.
“Ex-mill sugar prices which dropped by Rs 2 to 3 per kilo since the second week of November 2016 after demonetisation have started improving and are now at the levels seen a couple of years ago,” a senior industry official was quoted by Business Standard as saying.
With lower sugar consumption in 2016-17, sugar stocks at the end of the current season may higher than what was estimated earlier, by 0.5-1.0 million tonnes.
“With higher cane price announced by states such as Uttar Pradesh, Punjab and Haryana, low sugar recovery being achieved in the Tamil Nadu, Andhra Pradesh and other states, and lower capacity utilisation in drought-affected areas of Maharashtra, Karnataka and Telangana, the all-India average cost of production of sugar during the current 2016-17 SS, will roughly be higher at around Rs 35 to 36 per kilo (Rs 2 more than the previous year’s cost of production),” Abinash Verma, Director General of Indian Sugar Mills Association, said in a report.
