The Hindu Business Line : Uptrend in sugar continues

SUGAR prices continue to rule higher mainly on continued buying from bulk consumers, retailers and upcountry traders in view of good seasonal demand. On the other hand, supply was tight, trade sources said.

Sugar prices on Monday were up by Rs 5-36 per quintal over weekend closing.

Sugar Small grade (S-30) prices rose at Rs 1,491-1,525 per quintal. Medium grade (M-30) prices, too, were up at Rs 1,530-1,585 per quintal.

"Sugar prices in the open market have been persistently rising in past few days thanks to good demand from States around Maharashtra. Sugar mills in Maharashtra are one of the major suppliers to adjoining areas," a leading trader said.

"Marriage season is in full swing and demand from other States is good. There is some brisk buying from West Bengal. Traders are keenly interested in buying from Maharashtra and Karnataka mills," another trader said.

"Sizable quantities of supply are going out of the State to meet the hectic demand," Mr Mohan Gurnani, President of the Bombay Sugar Merchants' Association (BSMA), said.

"We have urged the Central Government to release additional quota to keep the prices under control," he added.

"The weekly lifting from sugar mills will ensure a steady flow of sugar into the open market in four lots equally of 25 per cent of the monthly release quantity to avoid an artificial shortage in the market," Mr Kanhaiyalal Gidwani, Convenor of action committee for essential commodities of Shiv Sena party, suggested.

At present, the sugar is released in two lots. Buyers gets delivery from the sugar mills in first lot say from 1st to 15th of each month; and in second lot, from 16th to till end of the same month.

"Further, with weekly lifting, sugar mills will get payments on a weekly basis there by making it possible for the mills to pay farmers earlier," he added.

Sugar production during the October to December (2003) period dropped by 3.7 per cent as against 8.7 per cent decline recorded in the same period of 2002, according to the Centre for Monitoring Indian Economy (CMIE).

Sugar production estimated by various sugar associations is placed at 175-180 lakh tonnes, down from an all-time high of 201.50 lakh tonnes last season, the agency said in its latest monthly report.