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A sharp decline in sugar prices on the Vashi wholesale market was witnessed on Tuesday with spot and naka rates sliding Rs 35-40 a quintal on lack of demand.
Last season's sugar was sold at lower rates; mills are expecting higher rates for current year's sugar. The sentiment was weak.
Tender rates also declined by Rs 10-20 a quintal and were expected at further lower rates in the evening, said traders.
Mr Jagdish Rawal, Joint Secretary of Bombay Sugar Merchants Association, said: “ Most of the mills are quoting higher rates in their tenders, resulting in poor response. Mills are bound to come under pressure in the coming days for offloading current month's higher quota. Currently, they are not very keen to sell expecting higher prices.”
He said that this month due to higher free sale quota of 17 lakh tonnes, sugar prices have already declined by over Rs 80 till now.
Further decline may be expected because of desperate selling by mills.
The government is very conscious about sugar export due to high food inflation.
Arrivals in the Vashi market were higher than local demand / dispatches adding the market inventory and arresting the fresh buying of stockists. Delhi, Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal markets are also experiencing lack of demand, keeping the sentiment bearish.
Tender offer form the most of the mills were open as they quoted higher rates.
On Monday 8/10 mills came forward with tender offer and sold about 35,000-40,000 bags of sugar in the range of Rs 2,780-2,820 for S-grade and Rs 2,820-2,870 for M-grade a quintal to local and State-level traders.
On Tuesday arrivals in the market were about 38-40 truckloads (100 bags each) and local dispatches were about 36-38 truck loads.
According to Bombay Sugar Merchants' Association, spot rates were: S-grade – Rs 2,896/2,942 (Rs 2,941/2,965) and M-grade – Rs 2,921/3,001 (Rs 2,946/3,021). Naka delivery rates were: S-grade – Rs 2,850/2,880 (Rs 2,880/2,920) and M-grade – Rs 2,900/2,940 (Rs 2,930/2,960).
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