Poor sugarcane production and government policy pertaining to ethanol blending (E10) will put upward pressure on sugar prices

Sugar price reached an all-time high of Rs. 3,694 per quintal in August, 2016. The sugar price has increased on an average by 46% during April-November, 2016. Acuité estimates sugar prices to be around Rs 3,600 in current seasonal cycle (September-April 2016-17) with a standard error of Rs. ±300. Since the production is likely to be below consumption, the price is expected to remain on the upward limit. India is a net sugar exporter; higher sugar price will insure that the government will raise duty and curb export. Even though whole sale prices breached the Rs 4000 mark in January, we expectthat sugar price are likely to remain below sub Rs. 4,000 levels in the medium term.

Poor sugarcane production and government policy pertaining to ethanol blending (E10) will put upward pressure on sugar prices

Poor sugarcane production and government policy pertaining to ethanolblending (E10) will put upward pressure on sugar prices. The sugar production declined by (-) 11% in FY16 and expected to continue the negative trend in FY17 as well. Acuité estimates the sugarcane production to fall by (-) 6.6% in FY17 owing to lower sown area under this crop.

Principal factors influencing the category  

(Updated as on March 15, 2017)