Mill Gate Sugar Drops, But Your Sugar Bill Climbs

Mill gate sugar prices experienced a further decline on Tuesday, with S-grade sugar trading between ₹5,400 and ₹5,500 per quintal. This contrasts sharply with the all-India average retail sugar rate, which reached a new peak of ₹63.97 per kg on the same day. Industry sources anticipate that retail prices will begin to reflect the lower mill gate rates within a couple of days, dropping below the ₹60 per kg mark.

The surge in retail prices was attributed to higher rates in non-sugar producing states. However, major metropolitan areas saw a decrease, with Chennai at ₹67 and Mumbai and Delhi at ₹62 per kg as of Tuesday. Government interventions, including allowing duty-free import of 1 million tonnes of raw sugar, cracking down on hoarding, and reducing stock limits for bulk buyers, are aimed at curbing the price rise.

Globally, sugar prices showed mixed trends, with raw sugar futures rising in New York but white sugar prices falling in London. The "abnormal surge" in domestic prices was reportedly initiated by a mill in Karnataka fixing prices at ₹6,000 per quintal, a move soon followed by others. Some traders also capitalized on the situation by building stocks.