Sugar prices performed quite well in the previous year and 2023 has opened on a positive note. Overnight, global sugar prices gained between 2-2.5 percent for both white and raw sugar.

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The raw sugar prices for 2022 closed the year as a fourth straight year of gains. Last year, the raw sugar prices gained by more than 7 percent, and the white sugar prices which are trading at $550 a tonne right now also gained by nearly 13 percent in the previous year.

Sugar prices did go down to 2-month lows as the year was ending and that was because the funds were taking profit but that sell-off also seems to have dried up right now. The funds seem to be coming back into the market on the lower side and that clearly has been supportive.

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The Indian demand seems to be getting better now, Makar Sankranti is a time that India does buy and consume a lot of sugar and this is also a period that after a gap of nearly a month, the Indian wedding season also kick starts. So the markets are anticipating some demand coming in because of that as well.

Brazil's political unrest and await for a fuel policy there are a couple of other factors which have kept the premium on prices.

Having said that Indian sugar exports are something that the markets are keeping an eye on. Remember 6 million tonnes is what is allowed and we do understand that while all of that may have been contracted by now the actual exports stands at 1.7 million tonnes, the rest is expected to be exported by the month of March.

Good sugar output is expected from India, Brazil, and Thailand, and that seems to be keeping a lid on the prices right now, but a good sector and a good start yet again for 2023.

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(Edited by : C H Unnikrishnan)

First Published:Jan 11, 2023 12:34 PM IST