Wholesale sugar prices in the national capital today hit a record Rs 4,450 a quintal on supply concerns after the government cut back supply of the sweetener for sale this month.
But, according to traders prices may scale to even higher levels on rising demand for the ongoing marriage season.
They say the supply demand gap is increasing, triggering fears of more hikes in sugar prices in retail markets during the marriage season.
Though traders point to the low volumes,the agriculture ministry says the 14.30 lakh tonnes of sugar allocated for open market sale by mills in January is adequate to meet the domestic demand for the month.
Prices of sugar (ready medium) and second grade shot up by up to Rs150 to Rs 4,350-4,450 and Rs4,340-4,440 per quintal, respectively.
Prices of the sweetner have already risen to Rs44 per kg from Rs35.90 in the retail markets in the past 15 days, according to dealers in the capital. The prices have also received a push due to reports of the sweetener becoming more expensive in international markets, according to analysts.