Sugar prices up on deficient rainfall in key cane states

economictimes.indiatimes.com:

sugar prices have been rallying by about 3% in last one month on persistant monsoon deficit in key sugarcane producing states. Retail sugar prices have been ruling between ₹40 and ₹45/kg across the country.

The benchmark factory gate sugar prices in Kolhapur for S-30 grade; the smallest sized grains of sugar, have almost touched ₹37/kg from around ₹34/kg in June.

Considering the supply side challenges and 'strong demand,' the central government had released an additional quota of 2 lakh tonnes last month on August 22 in addition to the 23.5 lakh tonnes it had already allocated for August. The sugar quota for September is at 25 lakh tonnes, more than over 6% from the quota for the corresponding month of the previous year.

The government allocates a monthly sales quota to every mill in the country because sugar is a regulated industry.

The major factor that has supported the rise in prices is insufficient rainfall in the sugarcane growing states of Maharashtra and Karnataka.