Molasses prices on downward trend
After rising to around Rs 6,000 per metric tonne (Maharasthra) in May 2005 from Rs 2,200 per month in May 2004 - molasses prices may come down. During same period - it had moved to Rs 5,600 in UP and Rs 6,500 in Kerala from Rs 1,850 and Rs 3,400 during the same period.
However, prices have now dropped to Rs 4,000 per metric tonne in Maharashtra and Rs 3,000 per metric tonne in UP in anticipation of bumper sugar crop.
The prices in India had firmed up following failure of sugarcane crop last year following drought condition. This development contributed to the escalation in molasses prices globally from $30 to $110 per metric tonne at CIF Indian port. For Radico Khaitan, molasses constitute 27% of the raw material cost, while for UB, it accounts for 8-10% of the end consumer prices. Government taxes continue to be 60-70% of the end consumer price. However, liquor consumers may not expect the end prices to come down as both UB and Radico have already passed on the hike in molasses prices to the consumers.
June 25' 2005
