The Hindu Business Line : Sugar prices crash on extra release of free sale quota

SUGAR ready prices suffered a sharp setback on Thursday. The follows the announcement of release of one lakh tonnes of sugar additionally under the free sale quota by the Government on Wednesday evening.

Small quality (S-30) declined to Rs 1,565/1,595 from Rs 1,580/1,655 a quintal quoted on Monday. Medium sugar quality (M-30) also edged down to Rs 1,605/1,645 a quintal from a recent high of Rs 1,634/1,704 per 100 kg.

"Sugar prices for check-post delivery also declined on fresh bouts of selling pressure. Limited buying enquiries from retailers also dragged down prices. The Government announced extra quota at a time when ready prices touched a recent high of Rs 1,704 per quintal," a leading trader said.

"Prices may go down further, say by Rs 30/35 per quintal, on increased supply. Fresh buying from upcountry traders may emerge at lower level," he said.

The Government released extra free sale quota of one lakh tonnes for August, by revalidating release orders for the un-lifted free sale quota of sugar for the period January to March 2004, an officials said. "Maharashtra has been allocated 17,000 tonnes," they said. Total allocation to Maharashtra has been increased to 3.47 lakh tonnes.

Earlier, the Government released 10 lakh tonnes of free sale quota for the current month. With a levy quota of 2.16 lakh tonnes of sugar already released for the month, the total availability of sugar for August would be 12.16 lakh tonnes. With the extra release of one-lakh tonnes, the total sugar availability during the month would be 13.16 lakh tonnes.