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Spot sugar prices on the Vashi wholesale market fell sharply by Rs 20 a quintal on Friday, taking this month's decline to Rs 150. Naka rates fell by Rs 20-25. Desperate selling by mills at lower price to finish the current month quota in time led to a free fall on Friday. At mill tender level, the price fell by Rs 40-50. In late evening, rates were quoted further lower by Rs 10-15.
The sentiment was weak as there was no indication of any supportive measures from the Government, said traders.
Mr Jagdish Rawal, joint secretary of Bombay Sugar Merchants Association, told Business Line : “Sugar prices at the Vashi market declined by Rs 170-200 in naka and mill level this month on higher free sale quota of 17 lakh tonnes. Very limited buying by stockist and continued lack of demand with absence of upcountry buying created a sufficient inventory stock in the Vashi market and at the mill level. Higher inventory mounted pressure on mills to offload allotted quantity before due date and convert the balance in to levy quota. Till Friday, there was no indication of the expected lower free sale quota in February, forcing mills to sell at lower price.” According to sugar industry, from October to January the sugar production was 15 per cent higher at 84 lakh tonnes against the 73 lakh tonnes last year. In India sugar production in 2010-2011 is estimated at 245-250 lakh tonnes higher than 190 lakh tonne last year. On Thursday evening 12-13 mills came forward with tender offers and sold 25,000-30,000 bags of sugar in the range of Rs 2,690-Rs 2,740 for S-grade and Rs 2,730-Rs 2,770 for M-grade a quintal. Most tenders were kept open by mills.
Arrivals at the Vashi market were lower at 32-35 truckloads ( 100 bags each) and local dispatches were 30-32 truckloads.
According to Bombay Sugar Merchants Association rates were: Spot rates: S-grade Rs 2,830-2,871 (Rs 2,851-2,891) and M-grade Rs 2,876-2,931 (Rs 2,886-2,951). Naka delivery rates: S-grade Rs 2,800-2,820 (Rs 2,810-2,840) and M-grade was Rs 2,840-2,870 (Rs 2,850-2,890
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