Sugar prices in India have risen by approximately 7 percent in the past three weeks, and there are indications that they will continue to increase. This price surge is driven by a combination of factors, including lower inventories and stronger demand.
One of the primary reasons for the increase in sugar prices is the fall in production. As production drops, demand remains high, particularly in bulk consumer segments. Additionally, the peak summer season has added to the increased demand for sugar, driving prices even higher.
Another factor contributing to the price rise is the recent trend of ethanol production. With a rise in ethanol production, sugar supply is being diverted to ethanol production, resulting in decreased sugar inventories. This trend is further fuelled by Brazil ending its tax exemption program for ethanol. Furthermore, there is growing demand from China and Europe, which is further adding to the upward pressure on sugar prices.
Speaking to CNBC-TV18, Atul Chaturvedi, Executive Chairman at Shree Renuka Sugars, said, “Sugar demand in the country is reasonably strong. And there is no reason why Indian values should not start inching up. I am using the word inching up for the simple reason that Indian values cannot move in tandem, in the same proportion as the world values, because it is a highly insulated market. But definitely, the effect is there and what we are seeing is it's gone up by about 6 to 7 percent in the last week or 10 days, and there is still some potential for it to go up.”
He added, “So at Rs 35-36, I don't think it's an expensive buy for an Indian consumer, and a couple of rupees more going up I don't think too many eyebrows will be raised as far as the decision-makers are concerned.”
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India is the largest exporter of spices across the globe, offering spices and related products of over 200 types. In FY22 alone India exported worth $4.1 billion in spices. One of the spices that India exports is jeera or cumin, and the prices here have seen a jump of over 45 percent in the past month, amid high demand and fears of crop damage due to unfavorable weather.
CNBC-TV18 spoke to Harjiv Swani, Director at Swani Spice, to discuss what India's spice landscape looks like right now.
Watch the video for more.
First Published: Apr 11, 2023 5:08 PM IST
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