Sugar mkt sweetens as June quota hopes stabilise prices

Cooling temperatures, monsoon expectations and controlled supplies likely to keep sweetener prices largely range-bound through June

The Centre is likely to fix the June sugar sales quota between 2.25 million tonnes and 2.30 million tonnes, broadly in line with May allocations, as market participants expect seasonal demand to moderate with the arrival of the monsoon.

 According to traders and industry officials, the government is expected to announce the June quota within the next couple of days.  Market participants said the proposed allocation would be sufficient to meet demand despite expectations of some firm buying during the early part of the month.

  The sugar sales quota for May was fixed at 2.25 million tonnes, lower than April’s 2.30 million tonnes and below the 2.35 million tonnes allocated in May last year.

   Demand remained strong in May due to peak summer consumption from soft drink makers, ice-cream manufacturers and rural wedding-related purchases. Industry participants said sugar mills sold quantities beyond the allocated quota to meet market demand.

   G.K. Sood, chairman of MEIR Commodities India, said demand remained firm and out-of-quota sales were likely to continue even in June. Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association, expects the June quota to remain unchanged at 2.25 million tonnes. 

 He said lower temperatures and the absence of major festivals next month would reduce consumption compared with May.

Naresh Gupta, a north India-based trader, also projected the quota between 2.25 million tonnes and 2.30 million tonnes, saying the expected monsoon onset would cool temperatures and lower demand from beverage and ice-cream industries.

  However, traders said sugar prices are expected to remain range-bound due to concerns over a possible delayed or patchy monsoon linked to El Niño conditions. Warmer weather for a longer duration could keep household demand firm and support prices.

  Traders expect prices to rise by ₹20-₹30 per 100 kg during the beginning of June due to household buying. Sugar prices in major markets are currently ruling around ₹3,945-₹4,160 per 100 kg.

 Industry concerns over weather disruptions also persist. Traders warned that El Niño conditions could affect sugarcane crops in Maharashtra through above-normal temperatures and uneven rainfall, potentially tightening supplies in the coming months. Indian Sugar & Bio-Energy Manufacturers Association has lowered its 2025-26 gross sugar production estimate to 32 million tonnes from 32.4 million tonnes projected earlier.