More Commodities - Sugar

'The Sugar High'

April 6, 2017 at 12:43 PM , Mark Overseas
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The production of Sugar is likely to decline by 19% this year due to poor rainfall.

What happens when there is a lack of supply during it's peak time of the product? 

The prices shoot up and are sky high. This is what has happened in the Sugar market, the production of sugar declined due to poor rainfall in the key growing regions of Sugar; Maharashtra and Karnataka. 

The domestic sugar consumption is also expected to decline by 4% in 2017. Despite the low production and domestic demand the closing stocks at the end of the Sugar year 2017 are expected to be around 4-4.5 million tons, which will be sufficient to meet the requirement for the next two months consumption.

The prices are expected to remain firm in the next 2-3 quarters, due to tight stock position in the domestic and global markets. And the decline in domestic demand may not affect the prices.

Abundance production of Sugar in Brazil which led to their market gain as the prices were low compared to Indian Sugar.

However the demand is expected to increase from bulk buyers due to the summer season.

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