Sugar prices remain firm; rise up to Re 1 per kg

Sugar prices continued to rise in the national capital's retail market today and gained up to Re 1 to Rs 40/41 per kg as the government had earlier this week announced measures to help the cash-starved industry.

In the wholesale market, the prices of the sweetener edged higher by up to Re 1 to Rs 34 per kg.

Sugar traders said further tight supplies from millers who are holding back stocks in anticipation of a rise in the prices of the sweetener also supported the uptrend.

As against 5,000 bags yesterday, nearly 4,500 bags of 100 kg arrived in the market today, they said.

Generally, on an average 14,000-15,000 bags used to arrive in the capital before the government's measures to bail out the industry.

Besides, strong demand from bulk consumers including soft-drink and ice-cream makers was also responsible for the persistent rise in the sweetener's prices.

In order to bail out sugar mills that were unable to pay dues worth Rs 11,000 crore to cane growers, the government had on Monday decided to hike import duty on sugar to 40 per cent and extended export subsidy of Rs 3,300 per tonne till September this year.

Besides, the government also decided to provide additional interest-free loans of up to Rs 4,400 crore, especially for clearing cane arrears.

India is the world's second largest producer as well as the largest consumer of sugar.