Sugar prices in the spot market on Wednesday ruled weak on higher arrivals . Local retailers and stockists demand improved as Mathadi Kamgar will observe a bandh on June 10. Desperate selling by some mills in need of liquidity kept naka and tender rates under pressure. Spot sugar rates were down by Rs 5-10 a quintal. Naka and tender rates lost Rs 15-20. Despite weakness at the upper level, the sentiment was steady in spot on increased demand, said traders.

Mr Harakhchand Vora, Vice-President of Bombay Sugar Merchants Association, told Business Line: “Local retailers and stockists were active buyers today as prices are ruling at low level and secondly, covering based buying of traders/stockists before Mathadi Kamgar observes a bandh on Friday. At the lower level, buying by neighbouring States supported the market sentiment. Last week on Saturday, about 8-10 rail rake traded mostly with eastern side buyers. This week, they are interested at lower rates, but due to local purchase support rake trade has not been done till now . Prices will not go down further as prices in the international market has also shot up by more then $100 in last one month and mills are not keen to sell at lower price or below parity in local on increase chances of exports.”

Mr Jagdish Rawal, joint secretary of the association said, on one side mills are also not very keen to sell at lower prices (below parity) and on the other side, improvement in local demand will lead to stability. . Neighbouring States buying interest at lower level and demand for good quality sugar, supported volumes to rise steadily. This week, higher price (about Rs 2,700) at Gujarat diverted States buying to Maharashtra because of low (about Rs 2,500) rates. Buyers from Gujarat continuously buy in truckloads. Shortage of trucks at producing level resulted increase freight rates by Rs 25-30 for a bag in the last 3 weeks. Sentiment will improve in line with demand in coming days.

On Tuesday, about 24-25 mills sold 81,000-83,000 bags of sugar (100 kg each) in the price range of Rs 2,475-2,520 for S-grade, and Rs 2,530-2,610 for M-grade, sources said. Good quality M-grade was sold by mills at Rs 2,660 also. Arrival in the market was 44-45 truckloads (each 100 bags) and local dispatch was about 47-48 truckloads.

The Bombay Sugar Merchants Association sugar rates were : Spot: S-grade Rs 2,621-2,681 (Rs 2,626-2,686) and M-grade Rs 2,681- 2,821 (Rs 2,681-2,851).

Nakadelivery rates : S-grade Rs 2,580-2,600 (Rs 2,590-2,620) and M-grade was Rs 2,625-2,750 (Rs 2,640-2,720).

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