Sugar prices fall because of oversupply

Source: The Hitavada      Date: 13 May 2018 08:17:56


 

Business Bureau,

THE common man has a reason to smile these days as the price of sugar, one of the essential commodities, has declined. The price of sugar has drastically fallen due to excess supply in the wholesale market. The price of sugar that had touched a level of Rs 38 - Rs 39 per kilo in October 2017 has now come down to a range of Rs 28 to Rs 29 per kilo thereby giving a much needed relief to consumers.


Commenting on the matter, Rajesh Chabrani, a well-known trader based in Kalamna Marketyard, told The Hitavada on Saturday that the price dilution is due to bumper production of the sugarcane crop in major sugar producing countries like Brazil, Thailand and India.


“The recent season for sugarcane cultivation was overwhelming wherein huge quantity of the crop was recorded. It eventually surged the supply and ultimately affected the prices,” he said.
Chabrani further said that sugar is also experiencing poor demand for various reasons which is also mounting pressure on the pricing structure.


With over supply of the sweetener in the international market coupled with lower demand the price has taken a beating. The price of sugar has slid by 20 per cent to 25 per cent compared to the price in October 2017.
In the domestic market sugar is mainly used by manufacturers of food products like chocolates, confectioners, bakeries, cold drinks etc.


It is important to note that out of the total production of sugar in the country about 60 per cent to 65 per cent is consumed by various manufacturers units while 30 per cent to 35 per cent is consumed in households.
In a report it has been estimated that the average consumption of sugar comes to about 20 kg to 22 kg per head per year in the country.