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Sugar prices ruled steady on Wednesday due to routine demand and supply position.
After Diwali, local demand has fallen drastically. Some mills are offering tenders since than on the expectation that there will be favourable policy changes in the near future. On need based demand, volumes have reduced at upper level after two days of continue decline. Sentiment was cautious.
In the physical market, S-grade fine quality sugar declined by Rs 5 while M-grade fair quality increased by Rs 10. Naka rates under selling pressure stayed unchanged. After Diwali, lower demand at mill level further cooled the sentiment for fresh buying.
Higher arrivals resulted in increased market inventory this week. Markets in other producing centres also ruled steady on sufficient supply from mills.
Market sources said need-based local demand in the beginning of the month is keeping the sentiment positive. All are now eagerly waiting for any policy changes for the sugar sector.
In the current year India is expected to produce more than 250 lakh tonnes, according to traders. World sugar prices are also on a bearish trend. With the sufficient free sale quota of 17.01 lakh tonnes for November, domestic sugar market will see steady to bearish trend as in the second fortnight millers may witness pressure to sell to complete the quota in time.
With routine demand, Vashi market witnessed arrivals at 43-44 truckloads while local dispatches were at 38-40 truckloads. On Tuesday evening about 6 mills offered tenders and sold 35,000-40,000 bags to local traders in the range of Rs 2,680-2,760 (Rs 2,680-2,760) for S-grade and at Rs 2,800-2,900 (Rs 2,800 -2,900) for M-grade. In world market, sugar futures price extended loss further by $9.20 to $680.40 from $689.60 for December-11 futures on Tuesday.
Bombay Sugar Merchants Association's spot rates for S-grade were Rs 2821-Rs 2900 (Rs 2821-Rs 2905) and M-grade were Rs 2921- Rs 3061 (Rs 2906-Rs 3061).
Naka delivery rates: S-grade Rs 2760-Rs 2830 (Rs 2760-Rs 2830) and M grade was Rs 2870- Rs 3010 (Rs 2870-Rs 3010).
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