ChiniMandi, Mumbai: Tuesday 1st June 2021
Production & Export Overview:
According to the latest reports by Indian Sugar Mills Association (ISMA) the country till May 31,2021 has produced 305.68 LMT of sugar and about 57 lac tons of contracts for export of sugar have already been entered whereas 44 to 45 LMT has been exported for sugar season 2020-21. Additionally, 4.48 LMT in Oct- Dec 2020 quarter against the MAEQ of last season 2019-20. To read more click here
Monthly Domestic Quota Announcement :
In a notification issued on 31st day of May 2021, the food ministry has allocated 22 LMT monthly sugar quota for June 2021 to 555 sugar mills which is 3.5 LMT higher than the quota allocated in June 2020. In the previous month the Govt. allocated 22 LMT monthly sugar quota to 555 mills. The allocated quota for June 2021 is 18.2% higher than that of June 2020.
According to market experts, the market may witness pressure due to the surge in Covid-19 cases that has led to extended lockdown restrictions in various states. Millers are likely to face selling pressure amidst the pre-monsoon rains in many states.
The demand has been quite poor throughout the month of May with the surge in Covid-19 cases and statewise imposed lockdowns in different parts of the country amidst summers. The Central Government however has been reluctant to call for a nationwide lockdown on apprehension of backlash on the economic growth. Sugar millers have already been facing the heat with selling pressure, stocks piled, unlifted sold stocks,growing interests etc, logistics has also taken a backseat hence not being able to liquidate funds.
Market-men expect expect to witness the same situation until some eases are introduced to the statewise lockdowns. The industry is also eagerly awaiting some decision on the hike of Minimum Selling Price which is currently ₹3100/Quintal to improve the situation of stakeholders.
State wise Prices as on June, 01 2021 :
– Maharashtra:S/30 Sugar rates from millers are ₹3100 to ₹3120/Qntl. whereas M/30 ₹3125 to 3170.
In the resale market S/30 is trading at ₹3015 to ₹3040 whereas M/30 is trading at ₹3040 to ₹3110.
– Karnataka : S/30 Sugar rates from millers are ₹3180 to 3225 whereas M/30 is at ₹3275.
– Uttar Pradesh: The rates for M/30 are ₹3300 to 3315
– Gujarat: S/30 Sugar rates are ₹3260 to 3300 whereas M/30 rates are at ₹3350
– Tamil Nadu: S/30 Sugar rates are ₹3225 to 3300 whereas M/30 rates are at ₹3300 to 3350
(All the above rates are excluding GST)
GOI amends Sugarcane Control Order, 1961
The Amendment by GoI has allowed entrepreneurs to set up factories with sugarcane crushing & make ethanol directly from sugarcane juice & also allowed use of B-Heavy molasses for production of various types of ethanol. This will help in diverting surplus sugar to ethanol & timely payment to farmers.
To view the notification click here
Global sugar prices showed great volatility in May, after a strong increase in April. The initial rally in sugar futures contracts were driven by concerns about the persistent dry climate in the Center-South of Brazil, which is expected to affect the productivity of sugarcane fields in the 2021/22 harvest. Apparently, the appreciation of the real against the dollar has been a positive factor for sugar prices which removes the competitiveness of Brazilian sugar in the international market.
Friday’s Closing :
On Friday sugar prices climbed high where London sugar peaked to $462.30/ton with an appreciation of 1.05% whereas raw sugar on the New York Stock Exchanged was noted at $17.39/lb with an appreciation of 1.58% and extended its earnings owing to concerns on the Brazilian sugarcane harvest.
London white sugar closed at $459.60/ton with an appreciation of $2.10 whereas New York closed 0.24 points higher to close at 17.36/lb in comparison to the previous day. Yesterday the New York Stock Exchange was closed today due to Memorial Day, celebrated in the USA whereas the London Stock Exchange was closed due to Spring Bank Holiday.
Market Today :
The market opened firm and witnessed some fresh buying.
At the time of writing this update sugar prices are in the green with prices up more than 1.30%
London White Sugar front month contract is trading at $463.80/tn whereas New York Sugar front month contract is trading at 17.15/lb
Indian export rates today:
In the Indian market, white sugar for the season 2020/21 icumsa 100 ready delivery for exports is trading at ₹28700 to ₹28900 on ex factory basis. Demand for Raw sugar of the season 2020/21 icumsa between 600-1200 is at ₹27700 to ₹27800 factory basis
Comment on Sugar Market by Archer Consulting:
What we can assume from the confusing picture of the sugar market before us is that the appetite of the funds might be running out; the strengthening of the real, though temporary, will hold back the sugar quotations; 16-17 cents can consolidate as a price support over the medium term. If there is a resurgence of the pandemic, the real will certainly drop again, but the visible acceleration in the major economies (except for Brazil) should make oil prices appreciate and – if the parity with the international price is kept – gas will go up here. Cost inflation is deeply worrisome, the IGPM – General Market Price Index is soaring and the mills are (re)calculating their costs fearing the increase in inputs.
To read the entire article click here
Currency, Commodity & Indian Indices:
The rupee traded against the US dollar at 72.941 whereas USD was trading with BRL at 5.2183 Crude futures traded at Rs.4970, Crude WTI traded at $68.06 a barrel. Sensex closed 2 points lower at 51,9354.88 whereas Nifty ended 7.95 points lower at 15,574.85.