The Hindu Business Line : Spot sugar prices up 5 pc on demand

SUGAR spot prices have jumped up by about Rs 100 a quintal or 5 per cent this month on fresh buying by bulk consumers and retailers against reduced trade inventories.

At the Vashi wholesale market, spot prices of small grade (S-30) have increased to Rs 1,855/1,885 a quintal on Saturday from Rs 1,745/1,787 a quintal on July 1, while spot prices at the Muzaffarnagar, a major wholesale mark in north India, also increased by Rs 70 to Rs 1,867-1,870 a quintal from Rs 1,801-1,804 a quintal on July 1.

"Spot prices have touched 5-6 months' high of Rs 1,930 a quintal due to good demand from bulk consumers such as soft drink markers, biscuits and confectionery manufacturers. Also, trading inventories with stockists have reduced considerably, since June," a local trader said. The delay in the arrival of southwest monsoon rains and the subsequent dry spell has boosted sales of soft drinks and fruit drinks.

"Some of the bulk consumers who had bought adequate quantities last February have now re-entered the market. One major underlying factor, which has influenced the market, is de-control of sugar industry. There are talks that de-control would be delayed further ," a leading miller said.

However, traders feel that free sale quota of 11 lakh tonnes released by the Government is adequate for the current month to meet the domestic demand.

Prices are expected to rule firm on continued buying from bulk consumers, a trader said.

At the NCDEX, futures prices of maturing July contracts for M-grade were up Rs 50 at Rs 1,867 a quintal over the last two weeks on continued speculative buying interest, a broker said.

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