Sugar prices have fallen by 4 to 5 per cent since the withdrawal of export ban, contrary to the expectation that the move would boost domestic prices. Wholesale sugar prices have dipped from Rs 1,670 to Rs 1,587 a quintal in Delhi, while in Mumbai they fell from Rs 1,539 to Rs 1,474 a quintal since January 11. | |
| The government had imposed ban on sugar exports last July, which was lifted in two phases "" December 18 for Advance Licence and January 11 for Open General Licence. |
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| The prices are falling despite the contracts that many mills have undertaken to export sugar over the next couple of months. According to the Directorate of Sugar, mills have sought permits to export around 4 lakh tonne. |
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| "While the sugar realisations are falling, there is a pressure of higher sugarcane prices this year. The industry seems to have lost its direction. We are suffering because of a mismatch between the Union government's decision to ban exports for about six months and the state governments' populist decision to hike cane prices," said Sanjay Tapriya, director, finance, Simbhaoli Sugar Mills. |
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| In Uttar Pradesh, the country's largest sugar-producing state, cane prices were hiked from Rs 115-120 to Rs 125-130 a quintal this year. |
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| The country is on its way to producing record sugar at 230 lakh tonne against a consumption requirement of 185 lakh tonne. Last season, the total production was 191 lakh tonne. The consequent surplus could affect the cane payments to farmers and impact sugarcane acreage after two years. |
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| The withdrawal of ban has also failed to lift the sugar stocks, which fell by an average 20 to 30 per cent post-ban withdrawal. For instance, share prices of Bajaj Hindusthan on the Bombay Stock Exchange fell from Rs 201.55 to Rs 158.70 since |
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| January 11, while shares of Balrampur Chini fell from Rs 81 to Rs 56.80 over the same period. |
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