Daily Sugar Market Update By Vizzie – 21/12/2024

Introduction

Domestic sugar prices in India continue to trade higher as supply constraints and production concerns persist. Following earlier sharp drops, prices have stabilized at elevated levels, driven by reduced yields and lower output forecasts.In today’s update, we analyze the latest market trends, regional price movements, and factors driving the sugar market.

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Domestic Market TrendsPrice Movements

• Steady Price Rise: Domestic sugar prices remained firm, reflecting tight supply conditions and increased demand during the festive season.
• State-Wise Trends:
  • Maharashtra: Prices traded at ₹3,750–3,800 per quintal, supported by strong local demand.
  • Uttar Pradesh: Prices hovered around ₹3,850–3,900 per quintal, slightly higher due to transportation costs and demand spikes.
  • Karnataka: Prices ranged between ₹3,700–3,750 per quintal, with marginal fluctuations.

Key Drivers

• Lower Production Forecast: Sugar output is expected to drop to 27 million metric tons, fueling supply concerns.
• Weather Impact: Erratic rainfall and drought have affected sugarcane yields, limiting availability.
• Ethanol Diversion: More sugarcane is being allocated to ethanol production, reducing supply for traditional markets.

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Global Market UpdateExport Outlook

• Restricted Exports: The government’s focus on domestic supply stability has resulted in limited exports, adding pressure on global markets.
• Global Price Trends: International sugar prices are firming up due to reduced supplies from major exporters like India and Brazil.

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Market Analysis and ForecastShort-Term Outlook

• Price Volatility: Sugar prices are expected to remain firm as the industry navigates supply constraints and production cuts.
• Demand Trends: Festive and seasonal demand may continue to support prices in the coming weeks.

Long-Term Forecast

• Ethanol Focus: The shift toward ethanol blending programs could reshape supply chains, impacting sugar availability and prices.
• Weather Monitoring: Producers must adapt strategies to counter climate-related disruptions in future production cycles.

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Key Takeaways

• Prices Remain Elevated: Domestic sugar prices are trading higher due to reduced output and supply concerns.
• Export Limitations: India’s restricted exports are influencing global sugar markets.
• Policy Impact: Ethanol blending remains a priority, further tightening sugar supply.
• Market Volatility Expected: Traders should prepare for fluctuating prices amid uncertain production forecasts.

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ConclusionIndia’s sugar market continues to face supply challenges and price volatility as weather conditions and ethanol policies shape production and trade dynamics. Stay tuned for more updates on price movements, government policies, and global trends affecting the sugar industry.

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