In the past three weeks, sugar prices in India have increased by approximately 7%, and there are signs that this trend will continue. This cost flood is driven by a mix of elements, including lower inventories and more grounded request.
The decrease in production is one of the primary causes of the rise in sugar prices. Demand remains high even as production decreases, particularly in bulk consumer segments. Additionally, the peak summer season has increased sugar demand, resulting in even higher prices.
Another component adding to the cost rise is the new pattern of ethanol creation. Sugar supplies are being diverted to ethanol production as ethanol production rises, decreasing sugar stocks. This pattern is further fuelled by Brazil finishing its duty exception program for ethanol. Moreover, there is developing interest from China and Europe, which is further adding to the vertical strain on sugar costs.
According to Shree Renuka Sugars Executive Chairman Atul Chaturvedi, the country’s demand for sugar is fairly robust, and there are no reason why Indian values should not begin to slowly rise. He is using the term “inching up” for the straightforward reason that the highly insulated market of India prevents it from moving in the same direction as global values. In any case, certainly, the impact is there and how the situation is playing out is, it is gone up by around 6 to 7 percent somewhat recently or 10 days, and there is still a potential for it to go up.
