Sugar prices saw a slight uptick on Monday as market sentiment strengthened amid reports that the Indian government may soon raise ethanol procurement prices. Traders noted that even a modest increase in ethanol prices could encourage sugar mills to divert more cane juice and molasses toward ethanol production, potentially tightening sugar supply in the market.
Industry analysts say the anticipated price hike is part of India's ongoing strategy to boost ethanol blending with fuel, supporting energy security while offering mills an alternative revenue stream. With mills already facing higher production costs, a revision in ethanol prices could improve profitability and shift market dynamics in the coming months.
However, market participants are monitoring government decisions closely, as any policy change related to ethanol blending or sugar export quotas may influence price trends further. For now, sugar prices remain slightly higher, reflecting cautious optimism among traders and industry stakeholders.
