Sugar prices rose up to Rs 60 per quintal at the country's leading wholesale markets on stockists buying after the government raised import duty on the sweetener to 40% apart from an additional interest-free loan of Rs 4,400 crore for the mills.
The increased offtake by bulk consumers to meet summer season demand also influenced prices. In the national capital, sugar ready M-30 and S-30 traded higher at Rs 3,320-3,460 and Rs 3,300-3,430 as against previous levels of Rs 3,270-3,400 and Rs 3,250-3,380 per quintal. Thus showing a rise of Rs 50/60 per quintal.
Fears that sugar prices may rise further in the wake of government's decision to discourage import by raising duty to 40 per cent and improve funds liquidity for the domestic sugar mills, stockists were seen enlarging positions, said traders.
They said if monsoon remains subdued, prices are well set to rise further in coming days. "The hike in duty will support domestic sugar industry and make imports costlier", said a wholesale sugar trader in the national capital. The loan will be provided to cash-starved sugar mills to make payments to cane farmers, while the import duty on sugar will be hiked to 40 per cent from the current 15 per cent, food and civil supplies minister Ram Vilas Paswan said.
In order to bail out sugar mills that are unable to pay Rs 11,000 crore dues to sugarcane growers, the government also extend subsidy of Rs 3,300 per tonne on export till September this year.
In line with general trend, sugar mill delivery M-30 and S-30 followed suit and traded higher at Rs 3,160-3,300 and Rs 3,140-3,240 against last close of Rs 3,130-3,245 and Rs 3,110-3,225 per quintal, respectively.
In the millgate section, Mawana, Kinnoni and Asmoli also ended higher at Rs 3,230, Rs 3,300 and Rs 3,250 from previous levels of Rs 3,160, Rs 3,240 and Rs 3,210 per quintal, respectively.
At Mumbai's Vashi wholesale market, Small sugar (S-30) advanced by Rs 25 per qunintal to Rs 3,030/3,152 from last Satursday's closing level of Rs 3,005/3,152.
Medium sugar (M-30) climbed by Rs 15 per quintal to Rs 3,152/3,316 as against last weekend level of Rs 3,152/3,301.