Sugar prices on the Vashi wholesale market rebounded on Friday as fewer mills came forward to sell.
Direct mill tender prices ruled steady on expectation of higher demand ahead of Ramzan. Spot sugar prices increased by Rs 50-60 a quintal for S-grade and by Rs 30 for M-grade, tracking higher naka rates which improved in the range of Rs 50-Rs 70 a quintal. Mr Jagdish Rawal of B. Bhogilal and Co said that the drop in spot prices witnessed on Thursday was due to resale selling pressure. He said that traders are positive about higher demand in the coming days due to Ramzan and Hindu festivals such as Raksha Bandhan and Janmashthami.
Producers are not keen to sell at lower rates as there may be good support from exports. International sugar prices touched a three-month high on Thursday.
The Bombay Sugar Merchants’ Association has written a letter to the Union Government demanding immediate release of additional free sale quota and a ban on futures trading of essential commodities, Mr Rawal said.
If additional quota is not released, prices may go up further. With the opening stock of 50 lakh tonnes, sugar production in India expected to touch 260 lakh tonnes this year and domestic demand pegged at about 230 lakh tonnes, there is sufficient stock even if 30 - 35 lakh tonnes are exported, sources added.
International sugar prices extended steady gains on the fifth consecutive day on reports of dry weather in India — especially in Maharashtra and Karnataka — hurting cane crop. The world sugar market has been on the up since start of June due to delay in Brazil’s supply and its lower output estimate.
In the Vashi market, arrivals were 50-52 truckloads and local dispatches were 48-50 loads. On Thursday evening, a mere 10-12 mills offered tenders and sold 40,000 – 45,000 bags (each of 100 kg) to the local traders in the steady range of Rs 3,220-3,300 (Rs 3,210-3,300) for S-grade and Rs 3,340-3,400 (Rs 3,340-3,400) for M-grade. Market players were expecting slightly higher selling offers from direct mills in the evening.
The Bombay Sugar Merchants Association’s spot rates (Rs/quintal): S-grade Rs 3,371-3,431 (Rs 3,312-3,382) and M-grade Rs 3,402- 3,481 (Rs 3,370- 3,451). Naka delivery rates: S-grade Rs 3,350 -3,380 (Rs 3,280 -3,320) and M-grade Rs 3,380-3,430 (Rs 3,320-3,380).