India's Sugar Price Rally Attributed to Speculation Rather Than Supply Shortage
The recent surge in sugar prices in India, which has risen over 40% in two months, is being attributed to speculative buying rather than a genuine supply shortage. Niraj Shirgaokar, president of the Indian Sugar Mills Association (ISMA), stated that current stocks are sufficient to meet increased festival-season demand and dismissed concerns about shortages as artificial. In response to rising prices, India has permitted duty-free imports of 1 million metric tons of raw sugar for the first time in nearly a decade. India's annual sugar production was reported at 27.9 million tons during the marketing year ending September 30—slightly below consumption but higher than last year’s output. Shirgaokar noted that mills have diverted about 3 million tons of sugar to ethanol and exported around 800,000 tons this year.
Topics: commodities government policy speculation supply and demand