ChiniMandi, Mumbai: Saturday 12th June 2021
Domestic Market:
Update from DFPD :
According to the latest update from the Department of Food & Public Distribution, below are the updates
Sugar Exports:
Against the target of 60 LMT export of sugar , 52.50 LMT has been physically dispatched from sugar mills for export & 47.50 LMT of sugar has been exported from the country. Fastest sugar export in 5 months period in spite of logistics issues due to Covid pandemic.
Ethanol :
In ethanol supply year 2021-22(Dec-Nov), distilleries have supplied 152 crore litre ethanol to OMCs upto 31st May 2021 achieving 7.66% blending against 5% blending in last year. It will be 8%+ by Nov 2021, the highest increase in a single year.
Joint Secretaries Sugar DFPD & DFS had a meeting with officers of Chhattisgarh Govt, ethanol project proponents investing in CG, OMCs, Bankers. Investors are progressing fast. Chhattisgarh will be self-sufficient in ethanol production for blending in next 2 to 3 years.
CRISIL’s report on the sugar sector :
High sugar exports for the second sugar season (SS; October-September) in a row, coupled with increased supplies of ethanol – and at remunerative prices – for blending with petrol, will improve the operating profitability of integrated sugar mills by 75-100 basis points (bps) to 13-14% this fiscal, a CRISIL Ratings analysis shows. Also, the recent announcement by the government to advance the ethanol-petrol blending target of 20% by two years to 2023, could help sustain this momentum over the medium term.
Sugar stocks:
With ethanol being the next big story in India and the sugar industry in transition of becoming an energy providing sector, sugar stocks are playing well and analysts have remained bullish on the sector. While some sugar stocks were witnessed at a rally of almost 10% some major sugar company stocks kept hitting the upper circuit.
Market Scenario:
The market has been steady, no major movement has been witnessed. According to market-men Maharashtra state has witnessed demand picking with the ease in the lockdown. Meanwhile in Gujarat, Tamil Nadu and Karnataka the demand has been flat. Rains in many parts of the state slowened the demand and traded sugar in the recent days.
State wise Prices as on June 12, 2021 :
– Maharashtra:S/30 Sugar rates from millers are ₹3100 to ₹3120/Qntl. whereas M/30 ₹3125 to 3170.
In the resale market S/30 is trading at ₹3020 to ₹3050 whereas M/30 is trading at ₹3040 to ₹3110.
– Karnataka : S/30 Sugar rates from millers are ₹3200 whereas M/30 is at ₹3250.
– Uttar Pradesh: The rates for M/30 are ₹3310 to 3325
– Gujarat: S/30 Sugar rates are ₹3111 to 3131 whereas M/30 rates are at ₹3171 to 3181
– Tamil Nadu: S/30 Sugar rates are ₹3200 to 3300 whereas M/30 rates are at ₹3275 to 3325
(All the above rates are excluding GST.
International Market:
Yesterday’s Closing:
On Friday sugar prices closed lower on higher sugar output in Brazil Center South and weaker BRL. London white sugar closed at $454.70/ton down $8.60 whereas raw sugar on the New York Stock Exchange closed at 17.66 cents per pound down by 0.07 points.
Report by Food & Agriculture Organization of the United Nations
FAO foresees world sugar production to decline for the third consecutive season in 2020/21 (October/September), albeit slightly. The current production forecast of 170.3 million tonnes falls short of the predicted world sugar consumption, resulting in a global shortfall of 1.7 million tonnes.
Unfavourable weather conditions have led to lower output in Brazil, the European Union, the Russian Federation and Thailand, which more than offsets an expansion in China, India and the United States of America. On the demand side, world sugar consumption is foreseen to rebound, mainly reflecting the expected resumption of economic growth in 2021, after the COVID19-driven global economic contraction in 2020.
The forecast for world sugar trade in 2020/21 (October/ September) is pegged at 60.4 million tonnes, slightly down from the 2019/20 estimated volume. The contraction is the result of reduced exportable supplies anticipated in key exporter Thailand, combined with foreseen drops in exports by the Russian Federation and other European countries.
India’s exports are also anticipated to be slightly down from the record highs of last year. On the import side, lower imports by the United States of America and India are expected to more than compensate for an increase in purchases by China, the world’s largest sugar importer. In Indonesia, imports are also anticipated to drop slightly from the previous year, although demand is expected to remain strong, driven by the beverage and food processing industries. After falling to multiyear lows in April 2020, international prices of sugar generally increased in the past year, reaching in May their highest level since early 2017.
The hike in prices was prompted by continued concerns over tighter global supplies in 2020/21, following production declines in key producing countries, and sustained import demand from Asia. The weakening of the US dollar against the currencies of key sugar exporting countries, combined with the rally in crude oil prices has put further upward pressure on sugar prices. However, prospects of large exportable supplies and a recovery in global production have so far prevented larger price surges.
UNICA’s Update on Sugarcane harvest for the second half of May 2021
Sugar production reached 2,6 million tons in the second half of May. Since the beginning of the 2020/2021 harvest up to May 31st, accumulated sugar production reached 7,1 million tons. This result is 11.12% lower than the 8 million tons reported over the same period last year.
The volume of ethanol produced reached 1,9 billion liters in the second half of May. The accumulated production of ethanol reached 5,8 billion liters, with 1,8 billion liters of anhydrous ethanol and 3,9 billion liters of hydrous ethanol. Of the total fuel produced, 118 million liters of biofuel were produced from corn.
Indian Export Rates Today:
In the Indian market, white sugar for the season 2020/21 icumsa 100 ready delivery for exports is trading at ₹28600 to ₹28800 on ex factory basis. Demand for Raw sugar of the season 2020/21 icumsa between 600-1200 is at ₹28000 to ₹28200 factory basis. According to exporters, sugar mills are keen on exporting under OGL owing to the favorable international sugar prices compared to the depressing domestic sugar prices and no demand.
