Mumbai: Indian spot sugar prices fell on Tuesday on weak demand as traders from the central Madhya Pradesh state halted purchases to protest stock limits and raids by state authorities to implement them, dealers said.
“Traders from Madhya Pradesh are not buying due to government controls. Besides, demand from Punjab was also negligible,” said a trader based in Muzaffarnagar in northern Uttar Pradesh state.
The central state has imposed limits on amount of sugar held by traders, and recently seized stocks of the traders violating the limits.
Madhya Pradesh is not self-sufficient in sugar production and usually buys the sweetener from Maharashtra and Uttar Pradesh, the top two producers.
India has imposed stock limits on big sugar consumers, wholesale traders and retailers to check hoarding.
In Kolhapur, a key market in top producer Maharashtra, the price of the most traded S-variety sugar fell by 0.83% to Rs2,876 ($59.9) per 100 kg.
Hopes of good retail demand due to festivals restricted the downside, the trader said.
The country’s peak festival season is from August to October, when demand for sugar goes up as people consume more sweets and confectioneries.
India consumes about 23 million tonnes of sugar a year, but it produced only about 15 million tonnes in the year ending September and output is seen at 16 million tonnes in the next year.