Spot Market Update: Sugar Supported After Latest Policy Moves

Domestic Sugar markets have witnessed some buying in last few days and prices edged up from their two year low after the GST Council decided to refer to a five-member committee of state finance ministers the proposal of levying a cess on sugar as the Centre seeks to raise additional resources for providing production subsidies to sugarcane farmers. Few days back, the Union Cabinet had approved a subsidy of Rs 5.5 per quintal of cane to address the distress following the heavy slide in local Sugar prices. The subsidy would be directly transferred to cane farmers. Medium grade Sugar prices dropped to a two year low at the start of this month but edged up in last few days following these policy cues. The commodity currently trades at Rs 2690 per quintal, up 0.50% on the day.