Sugar prices on the Vashi wholesale market declined by Rs 10-15 a quintal for S-grade and Rs 9-30 for M-grade on Thursday as stockists sold heavily. Naka and mill-level prices ruled steady with old stocks selling Rs 5-8 lower.

Stockists are under pressure as they hold huge inventory and will now have to accommodate arrivals from the new sugarcane crop, traders said.

A small rise in freight rates kept upper level activities hand-to-mouth. In the futures market, prices gained marginally, up for the fifth consecutive session, as a ministerial panel gave its clearance for raw sugar exports with incentives. The Group of Ministers has decided to allow export of 40 lakh tonnes of raw sugar over two years. The incentive will be (calculated) on per tonne basis. “We have to calculate the incentive,” K.V. Thomas, Minister of State for Consumer Affairs, Food and Public Distribution, told reporters after the meeting in Delhi.

In the absence of exports and upcountry demand, prices dropped by Rs 80-90 for S-grade and Rs 40-130 for M-grade this month.

Global sugar prices are also ruling near four-year low, forcing domestic mills to sell the commodity in local markets to ease inventory burden. .

Arrivals at the Vashi market were 57-58 truckloads (each 100 bags), while local dispatches were 55-56 loads. On Wednesday evening, 17-18 mills offered tenders and sold 42,000-45,000 bags at Rs 2,610-2,700 (Rs 2,610-2,700) for S-grade and Rs 2,720-2,880 (Rs 2,720-2,880) for M-grade.

On the National Commodities and Derivatives Exchange, February contracts were up by Rs 6 at Rs 2,758; March by Rs 5 at Rs 2,765; and April by Re 1 at Rs 2,780 at the close of the day.

The Bombay Sugar Merchants Association’s spot rates were: S-grade Rs 2,752-2,905 (Rs 2,766-2,905); and M-grade Rs 2,922-3,032 (Rs 2,931-3,062).

Nakadelivery rates were: S-grade Rs 2,700-2,810 (Rs 2,700-2,810); and M-grade Rs 2,820-3,000 (Rs 2,820-3,000).

Uttar Pradesh rates were : Lakhimpur Rs 3,180; Muzzafarnagar Rs 3,170.

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