Sugar prices extended loss on third consecutive day on Friday due to routine demand and ample supply.

On the Vashi wholesale terminal market, spot prices dropped by Rs 30-45 a quintal tracking Rs 20-30 lower naka and mill tender rates. Higher selling pressure on producers to exhaust last month’s unsold 2 lakh tonnes levy conversion quota before Dec 10 kept the overall moral bearish. Local demand remained routine despite start of the month, said traders.

Jagdish Rawal, a wholesaler, said weak futures markets and continuous selling by mills in local markets kept supply ample and demand according to need.

Traders were optimistic about higher retail demand in the beginning of the new month but higher supply kept stockists away from fresh buying as market carries sufficient stocks. Sugar prices at the other main producing centres, Uttar Pradesh and in Karnataka, are ruling at par with the Maharashtra. Futures prices are also moving range bound with bearish mood. Analyst said higher sugar production cost due to increase in cane price and other inputs will not allow market to go down below Rs 3,000-3,100 level. On the other side, ample supply, need based local demand will keep prices under pressure. In the Vashi market, arrivals were higher at 64-65 truck loads (each of 100 bags) and local dispatches were 60-62 trucks.

On Thursday evening, 11-12 mills offered tenders and sold about 28,000-30,000 bags (each of 100 kg) to the local traders at Rs 3,180-3,270 (Rs 3,230-3,280) for S-grade and Rs 3,290-3,350 (Rs 3,300-3,350) for M-grade. Bombay Sugar Merchants Association’s spot rates: S-grade Rs 3,342-3,461 (Rs 3,389-3,480) and M-grade Rs 3,426-3,632 (Rs 3,460-3,661). Naka delivery rates: S-grade Rs 3,290-3,330 (Rs 3,300-3,330) and M-grade Rs 3,320-3,500 (Rs 3,370-3,540).

(This article was published on December 7, 2012)
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