Bears continue to rule sugar market

The sugar market continued to witness a weak trend on less-than-expected local and up country demand, as producers are continuously selling at reduced rates, according to their requirement.

On Thursday, in the Vashi market, spot sugar prices declined by Rs 3-5 a quintal tracking bearish trend in naka and mill tender rates. Some producers have off loaded material Rs 25 below the normal tender rates, and this indicates that mills are slowly coming under pressure to finish the quota in time . The sentiment was weak as traders' buying was need-based.

Mr Jagdish Rawal, joint secretary of Bombay Sugar Merchants Association said a proposed bandh will not take place on Friday due to a get-together programme. But there will not be any loading or unloading in the whole market. No local dispatches will be done on Friday and because of this, the market witnessed improvement in retailers demand for the last two days. Stockists have been buying as prices are low. However, due to less-than-expected demand all over, inventory building sentiment is not gearing up in the market.

Production

Production of sugar in the current as well as for the next season is expected to be very impressive, assuring smooth and easy supply position in the domestic markets. In the export front, despite international sugar prices having gone up sharply in the last one month, chances of exports are bright,but still there is no sign of any improvement at the domestic level . The area under sugarcane cultivation is expected to rise 15-20 per cent and so as sugar production will also rise, he said.

For the current month, the Government has declared a total 16.50 lakh tonnes of free sugar quota. Out of that, very little quantity has been sold by mills as yet. This could lead to distress sale in the second fortnight by the mills if market does not get the required demand. Demand from Gujarat and Maharashtra has increased due to high rates there. International prices continue to show an up trend.

International prices

On Wednesday, the world sugar price were up $20 to $714 ($694 ) a tonne, compared with $580 last month.

On Wednesday, about 27-28 mills sold 85,000-90,000 bags of sugar (100 kg each) in the price range of Rs 2,470-2,520 for S-grade and Rs 2,525-2,608 for M-grade. Lower quality S-grade sugar was sold at Rs 2,450 also. Arrival in the market was 47-48 truckloads (each 100 bags) and local dispatch was about 45-46 truckloads.

The Bombay Sugar Merchants Association sugar rates were : Spot: S-grade Rs 2,622-2,672 (Rs 2,621-2,681) and M-grade Rs 2,681-2,821 (Rs 2,681-2,821).

Nakadelivery rates : S-grade Rs 2,570-2,610 (Rs 2,580-2,600) and M-grade Rs 2,630-2,720 (Rs 2,625-2,750).

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