Sugar prices increased by Rs 10-15 a quintal on the Vashi wholesale spot market on Friday following positive outlook for demand in the coming months. On the other hand, futures ruled weak on profit booking. Expectation of higher demand from retailers before monsoon intensifies lifted the sentiments in the physical market, said sources.

Sources said that as producers are not willing to sell at lower rates on expectations that the State Governments will buy sugar for public distribution system from the open market. Further talk of increase in import duty supported the morale. Till now, millers were continuously selling on routine local demand. Demand from retailers generally slows down when the monsoon sets in.

Inventories with producers and traders are more than sufficient and this could prevent any sharp surge in prices. In Vashi market, arrivals continued at about 65-66 truck loads (each 100 bags) and local dispatches were around 64-65 loads. Market inventory was about 110-120 loads. On Thursday evening about 19-20 mills offered tenders and sold 88,000 – 90,000 bags to local traders at steady price range Rs 2,930-2,990 (Rs.2,930-Rs2,990) for S-grade and Rs 3,000-Rs3,090 (Rs 3,000- 3,090) for M-grade.

Prices in domestic futures cooled down after rising by Rs 60 – 70 a quintal in the last five days. On the National Commodities and Derivatives Exchange, July contracts declined by Rs 7 to Rs 3,116, August by Rs 9 to Rs 3,164 and September by Rs 11 to Rs 3,205.

The Bombay Sugar Merchants Association's spot rates were (Rs/quintal) : S-grade 3,082– 3,141 (3,070– 3,140) and M-grade 3,176 - 3,321 (3,172- 3,321). Nakadelivery rates : S-grade 3,050 -3,080 (3,030-3,070) and M-grade 3,130-3,200 (3,100-3,200).

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