Demand for sugar will go up in June

With the rules under lockdown getting relaxed, demand for sugar has started picking up from beginning of May, 2020. Now that the country is entering the unlocking phase, and restaurants and malls also being allowed to open, demand of sugar will further go up in June, as compared to May 2020. According to the ISMA, along with the summer demand, it can be expected that sugar mills may be able to sell the entire June quota, along with the carry forward from May.

Sugar mills in North India sold sugar as per their monthly quotas given for May, but the sugar mills in West and South India have a small quantity of unsold quota of May. The Government has extended the sale time of May quota and has released 18.5 lakh tons of monthly quota for June 2020.

It is estimated that upto the end of April, 2020, the sugar sales by mills was at par with the sales upto April, 2019 i.e. last year. This is thanks to the extra sales upto end of Feb 2020 by 10 lakh tonnes over last season. With demand picking up, and an expected increase in demand to refill the pipeline, which will come sooner or later, the sugar sales in 2019-20 SS may be around 5 lakh tonnes less than last year.

Accordingly, the closing balance at the end of current season, earlier estimated to be about 95-100 lakh tonnes, may be higher at around 115 lakh tonnes.

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