PRICES EXPECTED TO REMAIN FIRM
The measures appear to be having some impact.
“The fear of any shortage is now going out, so I believe the markets will stabilise and during the festivals, the consumers will get sugar at a reasonable price,” said Deepak Ballani, director general of the Indian Sugar and Bio-Energy Manufacturers Association.
“The on-the-ground situation as far as the sugar stocks are concerned, there’s absolutely no shortage in the country.”
The government says prices charged by sugar mills have fallen by around 20 per cent from their recent highs.
Retail prices, however, have eased more slowly. With Deepavali approaching, some industry experts believe the pressure on prices is not over.
“We are expecting prices to stay firm in the near term,” said Crisil’s Sharma. “There will be some sentiment impact from the government’s measures but it does not materially change the supply-demand dynamics.”
He said festive demand would absorb much of the additional imported sugar, meaning prices are likely to remain elevated.
“Structurally, we are in a scenario where consumption is increasing steadily but supply is not keeping pace with it,” he said.
Over the longer term, Sharma said India needs to increase sugarcane production, including by developing varieties that are more resistant to disease.
