Sugar prices drop by Rs5-Rs10 at Vashi spot market on Tuesday on ease local demand. Routine lifting by local retailers and continuous supply from mills kept overall liquidity of commodity ample – slightly higher in markets.
In absence of positive cues domestic futures markets also extended loss further by 12 – Rs17 till noon. Naka rates were down by Rs5 for S-grade and up by Rs10 for M-grade. Mill tender rates were almost steady. Some mills sold fine variety new sugar Rs5-Rs10 higher while old sugar were offloaded lower rates. Sentiment was weak said sources.
Observer said, in Vashi markets supplies are surpassing local demand. Everyday supplies are rising, but demand is weak due to the winter and absence of bulk consumers. A stronger rupee makes imports cheaper and exports costlier, which is a concern for the sugar industry. Demand for the sweetener from bulk consumers like soft drinks and ice-cream makers usually drops in India during the winter season.
They said domestic level free sale quota is sufficient rather higher considering slack local demand. India's sugar output rose by 3 per cent to more than 137 lakh tones in the first four months of the season beginning October 2012 and Mills in India are expected to churn out 243 lakh tonnes of sugar in 2012-13 higher than the expected local consumption of about 220 lakh tonnes.
Activities in Vashi market remain calm and routine. The arrivals in the market were higher 61-62 truck loads (Each of 100 bags) and local dispatches were 57-58 truck loads. On Monday 12-14 mills offered tenders and sold hardly 33,000 – 35,000 (Each of 100 kgs) bags in the steady range of Rs3,100 - 3,140 (Rs3,100-3,140) for S-grade and Rs 3,190 - 3,260 (Rs3,190 - 3,260) for M-grade.In World market March-13 futures closed lower by $4.00 to $498.50 ($502.50) and May-13 futures was $507.60 ($511.60) a tone on Monday.
On National Commodities and Derivatives Exchange sugar prices for March-13 was lower by Rs12 to Rs3110 (Rs 3122) and April was down by Rs18 to Rs3167 (Rs3185) till noon.
Bombay Sugar Merchants Association's spot rates: S-grade Rs 3,232– Rs 3,301 (Rs 3,236 –Rs 3,306) and M-grade Rs 3,292 - 3,441 (Rs 3,302- 3,446). Naka delivery rates were: S-grade Rs 3,180-3,220 (Rs 3,185 -3,225) and M-grade Rs 3,240-3,370 (Rs 3,230-3,350).