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Sugar prices strengthened further by Rs 15-20 in the spot market on Monday, despite the market being officially closed on account of Janmashthmi. Naka prices increased by Rs 20-25, while mill tender rates were expected to be higher by Rs 15-20. The sentiment was firm.
In the last three days sugar prices have gone up by Rs 60-70 a quintal due to erratic supply caused by the transporters' strike.
According to market sources, as the market was closed for Janmashthmi, no major deals took place at the upper level on Monday. There were no new arrivals and local dispatches from the Vashi market. The morale was firm as there is no indication of the transporters' strike ending soon.
Transporters' strike
Mr Mukesh Kuwadia, Secretary, Bombay Sugar Merchants' Association, told Business Line that owing to the uncertainty over the ongoing transporters' strike ending, freight rates at the producing level increased from Rs 65-70 to Rs 110-120 per bag. Dispatches from mills declined by more than 80 per cent. If the transporters' agitation continues, Mumbaikars may face a shortage of essential commodities during Ganeshotsav, which could push up the prices of commodities.
According to Mr Hemant Vora of Kavita Trading Co., due to the transporters strike, new dispatches from the producing centres have been badly affected but not the local dispatches as retail transporters have not joined the agitation.
Currently, the local demand is being met from market stocks, which have been declining since last Friday. Tight supply position may lead to prices going up further, he added.
According to sources, on Friday and Saturday mills sold about three rail rakes of about 81,000 bags of S-grade sugar at Rs 2,650-2,670 to neighbouring States, which has supported the bullish sentiment further.
About 7-8 mills offered tenders last weekend and sold about 25,000-30,000 bags to local traders at Rs 2,650-2,680 for S-grade and Rs 2,710-2,780 for M-grade. Fresh mill tender offers are expected to be slightly higher, by Rs 10.
Spot rates : S-grade, Rs 2,800-2,900; and M-grade, Rs 2,830-3,000.
Naka delivery rates : S-grade, Rs 2,730- 2,770; and M- grade, Rs 2,815- 2,900
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