Spot Market Update: Sugar Holds Near Two Month High

Spot Sugar gained recently as good demand was seen in the commodity. Prices have been mostly supported following media reports that state government has decided to provide soft loans worth Rs 4000 crore to sugar mills through the nationalised and other banks. The Medium Grade Sugar prices in the key market of Muzaffarnagar are trading flat at Rs 3300 per quintal today. Prices are lingering near their highest levels two months. The government has approved an increase in ethanol prices for the 2018-19 sugar season, starting October. The government has also extended the sugar export deadline for exporting 2 million tonne of sugar by three months, i.e. till December, since only 25% of the stated target has been shipped, according to media reports. Indias 2018-19 season sugar production is set to increase by about 10%, according to Indian Sugar Mills Association (ISMA), a private sugar industry body. It expects sugar production to touch anywhere between 350 lakh tonnes and 355 lakh tonnes in 2018-19, from 322.5 lakh tonnes in 2017-18. This is about 28-33 lakh tonnes more than 2017-18 sugar season production of around 322.5 lakh tonnes.