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Tuesday, Jun 25, 2002

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Sugar rises on monthly quota restoration

Our Bureau

NEW DELHI, June 24

OPEN market prices of sugar have staged a modest rally following the Government's decision to restore the mechanism of releasing free-sale quotas of mills on a monthly, as against quarterly, basis.

Mill delivery sugar prices have gone up by Rs 5-10 per quintal since the announcement of the decision late last week. Daurala mill sugar was quoted in the Delhi market today at Rs 1,325 per quintal, compared to Rs 1,311 per quintal on Saturday. Similarly, prices of Modi M-30 and Simbhaoili have formed up from Rs 1,305 and Rs 1,311 per quintal to Rs 1,316 and Rs 1,326 per quintal, respectively.

Prices of sugar from cooperative mills have also registered a Rs 5 per quintal increase since Saturday.

``The market has reacted positively to the decision to restore the monthly release mechanism. But the full impact on prices will take place only in the next 2-3 days'', according to traders here.

An official statement on Saturday had said the free-sale quotas of individual mills for the coming July-September quarter woud be released on a monthly basis, instead of the quarterly release mechanism that was introduced with effect from January 2002 (for the January-March and April-June quarters).

The release, however, clarified that the restoration of the monthly release system was a `one-time measure'.

The Government has justified the move by stating that it had received representations from the Indian Sugar Mills Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd (NFCSF) that the quarterly release of free sale sugar had `eroded market confidence', as a result of which sugar prices had been showing a declining trend.

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