Daijiworld Media Network - New Delhi

New Delhi, Aug 24: India has sufficient sugar stocks to meet domestic demand and prices are likely to moderate over the next few weeks as supplies improve, the Indian Sugar and Bio-energy Manufacturers Association (ISMA) said on Monday, dismissing concerns over an actual shortage.

ISMA Director General Deepak Ballani said the sharp rise in sugar prices over the past 15-20 days was largely driven by market sentiment, speculative buying and concerns over short-term supply rather than any structural shortage.

He said crop-related developments and global market conditions had also influenced prices.

According to Ballani, lower-than-expected sugar production last year in parts of Uttar Pradesh due to red rot disease and premature flowering in sugarcane affected market sentiment. At the same time, tighter global sugar availability pushed up international prices, which also had an impact on the domestic market.

Ballani said adequate sugar would remain available until the end of the current season on September 30 and the market situation was expected to improve shortly.

“Prices have already started showing signs of moderation. We expect this trend to gradually reflect in the retail market as well, providing relief to consumers,” he said.

ISMA President Neeraj Shirgaokar also assured consumers that the country had adequate stocks and would face no difficulty in meeting demand, including during the upcoming festive season.

Speaking to reporters, Shirgaokar said sufficient stocks would remain available even as the new sugar season approaches.

He said measures taken by the government would further improve market conditions and help ensure adequate supplies.

“There is no shortage of sugar in India. Production and stocks are at satisfactory levels. The current situation is largely driven by market sentiment ahead of the festive season and does not represent a structural supply crisis,” he said.

Meanwhile, ISMA Vice President Madhav B. Shriram rejected the argument that the ethanol programme was responsible for the recent increase in sugar prices.

“Our sugar mills and warehouses have adequate stocks. The shortage being projected in the market does not match the ground reality. Sugar is available and the impact of the steps taken by the government will be visible soon,” he said.