Mill gate prices of sugar drop further, but retail rates soar

Mill gate sugar prices experienced a decline on Tuesday, but retail rates surged to an all-time high of ₹63.97 per kilogram, according to industry sources. The all-India average retail prices are expected to align with mill gate prices within a couple of days, dropping below ₹60 per kilogram, the sources reported. Ex-mill or mill gate prices for S-grade sugar were between ₹5,400 and ₹5,500 per quintal on Tuesday, while M-grade sugar rates declined to ₹5,500-5,600 against the higher range of ₹5,700-6,100 on Monday. An industry source noted that there were few buyers even at this price point.

The Price Monitoring Division of the Department of Consumer Affairs recorded the new all-India average high price at ₹63.97, up from ₹63.05 the previous day. However, wholesale prices across cities fell by ₹300 per quintal. Retail prices were observed to be elevated in non-sugar producing States, with the decline in ex-mill prices predicted to lead to a drop below ₹60 in a few days. Major metros, such as Chennai, Mumbai, and Delhi, experienced a decrease in retail prices by ₹2-3 per kilogram on Tuesday.

The government's decision to permit duty-free import of 1 million tonnes of raw sugar is believed to be the primary factor driving the price reductions. Additionally, various government measures, including actions against traders involved in hoarding and monitoring physical stocks at mills, have contributed to the pressure on rising prices.

Global sugar prices saw an uptick on Tuesday, with October raw sugar futures on InterContinental Exchange, New York, increasing to 17.44 cents per pound, and spot prices reaching 17.66 cents. In London, white sugar dropped to $525.50 per tonne from $534.80. Industry sources suggested that the "abnormal" surge in sugar prices initially originated from a mill in Karnataka setting a price of ₹6,000 per quintal, followed by other mills across the country that began to follow suit.