The Hindu Business Line : Sugar prices likely to decline

Maharashtra had been allocated higher free sale quota of about 39 lakh bags (each of 100 kg) for February as against 38.20 lakh bags in January, sources said.

Wholesale prices in Mumbai witnessed a sharp rally last week on good demand due to marriage season and limitedarrivals from mills, traders said.

Sugar small grade (S-30) prices rose sharply by Rs 100/125 to Rs 1,386/1,446 per quintal at the Vashi (Navi Mumbai) wholesale market, while medium grade (M-30) prices, too, shot up by nearly Rs 150 to Rs 1,436/1,496 per quintal, a leading dealer said.

"Local prices were higher last week mainly because of good demand from upcountry traders, especially from Northern and neighbouring States i.e. Uttar Pradesh, Rajasthan and Gujarat. Sugar mills in Punjab had finished their sale quota by January 22-23. Hence, demand was diverted to Maharashtra," he said.

"Prices are likely to rule lower as the current month's supply allocated will be sufficient to cater to the ongoing seasonal demand," he said.

In December, the Union Government released sugar quota of 31 lakh tonnes for the first quarter of this year as against 25 lakh tonnes during the same period last year.

It released 10.5 lakh tonnes for January (7.5 lakh tonnes). February quota was higher at 10.5 lakh tonnes (8.5 lakh tonnes), while the March quota has been fixed at 10 lakh tonnes, up 15 per cent over March last.