Sugar Hits Two Month High On Hopes Of Govt Initiatives

Spot Sugar gained nearly half a percent to test its two month high of Rs 3000 per quintal in Muzaffarnagar today as media reports stated that the government is likely to announce a bailout package of over Rs 7,000 crore to ensure cash-starved mills clear dues to farmers. Last month, the government had announced a Rs 1,500 crore production-linked subsidy for sugarcane farmers to help millers pay cane payments. This had triggered some recovery in the beleaguered Sugar markets that have been stressed on excess output and lax global cues. The industry is also hopeful that the government would to approve a plan to set a minimum price at which millers can sell sugar, among a series of steps, to help improve domestic prices that have fallen below the cost of production amid a glut in production of the commodity. Some media reports also hinted that the government would build buffer stocks of sugar following the hefty surplus in the market. The Indian Sugar Mills Association (ISMA) has also urged the government to free sugarcane pricing in the coming season following the record output according to media reports. Spot Sugar in Muzaffarnagar averaged Rs 2737 per quintal in May 2018, down around 30% compared to May 2017.