Sugar price rises on monsoon worries

FPJ BureauUpdated: Sunday, June 02, 2019, 01:54 AM IST
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New Delhi Retail sugar prices rose in July and stood at around Rs 35- 40 per kg in the four metros on concerns over a possible decline in sugarcane output in marketing season starting October, 2012. ” The market prices of sugar remained stable up

to June but started showing an upward trend from July onwards,” Food Minister K V Thomas told Lok Sabha on Tuesday.

The minister added that the recent rise in prices was possibly on account of deficient monsoon leading to markets expectation of lower production in the ensuing 2012- 13 sugar marketing season ( October- September).

Sugar production in the 2011- 12 season is provisionally pegged at 26 million tonnes as against a domestic requirement of 22 million tonnes. Based on the estimated supply- demand and export of the commodity, the stock at the end of the current season is estimated at 6.2 million tonnes, he added.

The minister further said that other reasons behind the rise in retail prices of sugar are the cost of raw materials mainly sugarcane, conversion cost, domestic demand and supply, market sentiments, global price and output trends.

In the backof spike in sugar prices on fears of fall in output next year, industry body ISMA has said the sweeteners production would be around 25 million tonnes in 2012- 13 and will easily outrun domestic demand.

Economic think tank CMIE said that monsoon rains, which have been

ECONOMIC think tank CMIE said that defricient monsoon is likely to spur prices of food and non- food articles

deficient by about 21 % this season, is likely to spur prices of food and non- food articles.

” We expect the South- West monsoon to remain deficient and the major crop production to decline by 2.3 %. This decline in output of major crops is expected to add to the already high inflation seen in food articles,” the Centre for Monitoring Indian Economy ( CMIE) said in its report.

Inflation is likely to go up in food articles like cereals, pulses, oilseeds and vegetables.

” We expect the food inflation at 9.7 % during 2012- 13, against our previous projection of 9.1 %,” it said.

During the June- August period, the rainfall was deficient by 21 %. States that grow kharif crops like Gujarat, Rajasthan, Karnataka, parts of Maharashtra, west Uttar Pradesh received deficient rainfall even in July leading to decline in acreage of major crops by 10 %, it said.

Meanwhile, international commodity prices are expected to rise on account of the drought- like situation in the US and combined with the depreciating rupee, imports are likely to push up domestic food inflation.

Inflation in coal and electricity index is likely to remain high in 2012- 13, it said. ( PTI)

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