The price of sugar in India fell on November 20, 2012, due to a lack of demand in the spot market and a delay in the start of cane crushing in Maharashtra. The state of Maharashtra is considered to be one of the top producers of sugar in the country.
Most factories in the state begin sugar crushing by the first week of November, but this year the process was delayed due to a dispute between the farmers and mills over cane prices.
Prerana Desai, the vice president of research at Kotak Commodity Services said, “(The) Cane price issue has been resolved in Maharashtra and sugar mills are also under pressure to exhaust (their) October-November quota. All these factors are dragging the prices down”. On the other hand, the farmers and mills in the state of Uttar Pradesh are waiting for the state government to announce a state-advised price for cane.
Mill owners have been advised to sell 4 million tonnes of sugar in the open market during the month of October, 2012 and November, 2012, which is higher than the average monthly allocation of around 1.7 million tonnes. Desai added that this is also putting pressure on the prices. At the Kolhapur spot market, the price of sugar fell by Rs 2 to Rs 3,473 per 100 kg.