Sugar scales new high at Rs 4,450/qtl on supply constraints

Wholesale sugar prices in the national capital today scaled a new peak of Rs 4,450 a quintal on supply concerns after the government allocated less sweetener for sale this month.

Sugar prices, which have been on an upward spiral in the last couple of days, may hit new highs due to rising demand for the ongoing marriage season, traders said.

"The gap between demand and supply is widening, raising fears of more hike in sugar prices in the retail markets during the marriage season," said Delhi-based sugar merchant Sushil Garg.

Traders have blamed the current upward spiral in sugar prices to "low" release of sugar, even though the Food Ministry has said 14.30 lakh tonnes of the sweetener allocated by it for open market sale by mills in January is "sufficient to meet the internal demand for the month".

Prices of sugar (ready medium) and second grade jumped up by up to Rs 150 to Rs 4,350-4,450 and Rs 4,340-4,440 per quintal, respectively.

The surge in the prices already drove retail sugar prices to Rs 44 per kg from Rs 35.90 in the retail markets in the past 15 days, said a dealer at Baburam Ramkishan and Sons in the national capital.

Reports of the sweetener becoming more expensive in international markets are also to be blamed for the current rally here, Garg said.