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Sugar prices on the Vashi wholesale market declined on Wednesday. On the spot market, fair quality sugar dropped by Rs 10-20 a quintal on selling pressure, while fine quality sugar ruled unchanged on buying by stockists.
Naka rates for S-grade fell by Rs 10 a quintal while M-grade eased by Rs 30. Volumes were at usual levels, driven by need-based local demand. Continued absence of buying by neighbouring States forced Maharashtra's mills to offload stocks in the local markets. The market, according to sources, seems to be stabilising at current levels on reports of lower-than-expected production in Maharashtra and the possibility of the Union Government allowing an additional 5-10 lakh tonnes of sugar for exports.
However, a section of thetraders is not too optimistic.. According to them, the first tranche of 10 lakh tonnes of sugar permitted for exports by the Government need to be exported first. More than half of that still needs to be shipped, they said. So, announcement of additional quantity will not have a big impact.
Besides, the current year's production, at 260 lakh tonnes, is expected to be higher than the domestic consumption, at 220 lakh tonnes. And, because of an unfavourable world market, the producers have to depend on the domestic market.
Sugar prices went up by Rs 350 a quintal in November, but declined by Rs 250 in December.
In January, prices are expected to fall by Rs 50, indicating little room for further decline and more chances for the prices stabilising. If the world market improves, exports will lead the market trend, sources added.
At the Vashi market, 50-51 truckloads arrived, with local dispatches at 48-49 truckloads. On Tuesday, 19-20 mills offered tenders and sold 70,000-72,000 bags at Rs 2,720-2,820 (Rs 2,740-2820) for S-grade, and at Rs 2,820-2,920 (Rs 2,830-2,920) for M-grade.
Bombay Sugar Merchants Association's spot rates: S-grade, Rs 2,876-2,996 (Rs 2,891-2,991); and M-grade, Rs 2,960-3,092 (Rs 2,981-3,092).
Nakadelivery rates : S-grade, Rs 2,840-2,900 (Rs 2,850-2,900); and M-grade, Rs 2,910-3,050 (Rs 2,940-3,020).
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