Heavy selling in the resale market at the naka level before the due dates for lifting sugar from mills pulled down prices in Vashi by Rs 20-40 a quintal. Prices at the naka level dropped by Rs 30-60 a quintal. Mill tender rates were mostly steady, as demand from stockists is strong ahead of the festival season.
Profit booking in the futures markets weighed on the physical markets. Prices on the National Commodity and Derivatives Exchange were down Rs 50 a quintal till noon. Volumes in the physical markets climbed due to higher local despatches and arrivals.
Supplies during the festivals are likely to remain tight as the crushing season is still two months away. On the Vashi wholesale market, prices have shot up by Rs 650-700 a quintal in the past month. Lower yield is expected to offset the gains in sugarcane sowing, which is up at 52.8 lakh hectares in the current year (50.8 lakh hectares). Brokers said prices are rising on fears production next season at about 230 lakh tonnes will miss the initial estimates of 250 lakh tonnes. While the weak rupee helps by making Indian sugar cheaper, further forecasts of rain in Brazil and concerns about Indian monsoon will keep the market bullish, they said.
A wholesaler said arrivals and local despatches were higher on improved festival demand. The Union Government has released 47.66 lakh tonnes for the July-September quarter, but the free sale quota needs to be raised even more as local demand is strong. In Vashi, 58-60 truckloads arrived and 54-55 truckloads were locally despatched. On Saturday, 18-20 mills offered tenders and sold about 78,000-80,000 bags of a quintal each to local stockists at Rs 3,640-3,700 (Rs 3,650-3,680) for S-grade and at Rs 3,680-3,800 (Rs 3,680-3,780) for M-grade.
Bombay Sugar Merchants Association’s spot rates: S-grade Rs 3,671-3,742 (Rs 3,701-3,780), and M-grade Rs 3,742-3,881 (Rs 3,762-3,901).
Naka delivery rates: S-grade Rs 3,640 -3,675 (Rs 3,700-3,730), and M-grade Rs 3,730-3,800 (Rs 3,760-3,850).