Why does the price of sugar fluctuate so erratically?
Sugar is cyclic industry and the production of sugar oscillates widely year after year. The rule of arithmetic progression is followed in case of growth in demand and consumption of sugar which is not so in case of production of sugar. Depending on the production of sugar in the country as also the production of sugar worldwide, there are wild swings in the prices of sugar. The price of sugar is inversely proportional to the production of sugar. In the short run the prices of sugar also vary depending on the release of sugar in to the sugar market. Sale of sugar in India is regulated by the monthly release mechanism directed by the Government. Market sentiments triggered by baseless rumors also have a significant impact on the sugar prices in the short term.
