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Sugar ruled steady at the upper level on Wednesday, after continuous decline of Rs 70-90 a quintal in the fortnight.
Spot prices extended weak trend as poor quality sugar was sold Rs 6- 8 a quintal lower. Good quality sugar was in demand as traders considered the current prices low and production season will be over from next month. Local and upcountry demand is also expected to rise, said Vashi-based wholesalers.
Mr Harakhchand Vora, Vice-president of Bombay Sugar Merchants Association, said: “Considering below parity market rates, most of the players including stockists have now started buying according to need and to some extent as inventory as they believe there is a less risk of further downside move. Upcountry and neighbouring States buying is still not improved as expected because of smooth supply at respective levels in producing states such as Utter Pradesh, Karnataka, Gujarat. Lower than cost parity, current market price attracts fresh buying of stockiest.”
Another trader said in Vashi market 65-70 truckloads (each of 100 bags of a quintal each) is lying as inventory. At present, local demand is low due to monsoon but it is expected to rise soon.
At producing level about 15 lakh tonnes of sugar is lying in open space due to lack of proper storage facilities. Mills are concerned that rain may spoiler stocks are so are forced to sell at lower rates. It's a very critical position for them. However mill circles have demanded 15 lakh tonnes more of sugar exports under the free regime. Higher sugar production in expected in the current year and the next year.
Sources said on Tuesday 27-28 mills have sold 85,000-90,000 bags of sugar (100 kg each) in the price range of Rs 2,450-Rs 2,490 for S-grade and Rs 2,480-Rs 2,570 for M-grade. Arrival in the market was 50-52 truckloads (each of 100 bags) and local dispatch was 48-50 truckloads.
Bombay Sugar Merchants Association's spot rates were: for S-grade Rs 2,592-Rs 2,642 (Rs 2,592-Rs 2,652) and for M-grade Rs 2,656-Rs 2,791 (Rs 2,661-Rs 2,791).
Nakadelivery rates : S-grade Rs 2,540-Rs 2,590 (Rs 2,540-Rs 2,590) and M-grade was Rs 2,610-Rs 2,700 (Rs 2,610-Rs 2,700).
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