Soaring sugar prices may not be all good news, can harm trade

PUNE: Sugar prices have risen by more than 8 per cent in the last four days to Rs 35 per kg at mill gates, according to traders and analysts, who say this could harm trade. "Sugar prices have increased Rs 300 per quintal in the last 4-5 days. This price rise is not good for trade," said Ashok Jain, president of Bombay Sugar Merchants’ Association.

Sugar prices have increased by 28 per cent in the last six months.

The rising price trend on NCDEX is one of the main factors driving up the physical trade. NCDEX May sugar contract closed at Rs 3,550 per quintal on Monday, up 1.14 per cent.

"Factors like the opening up of market after a few days and increase in summer season demand were supportive for sugar," said Ashwini Bansod, analyst at Phillip Commodities India. April, May and June are normally the highest consumption months.