Selling by mills pulls down sugar

Our Correspondent Mumbai | Updated on January 21, 2011


Sugar prices at Vashi market declined by Rs 20-25 on Tuesday for ready and naka delivery on lack of demand and selling by mills trying to reduce the burden of this month's higher quota. Higher quota is pressing mills to offload the quantity before due date. Fresh buying is absent as less-than-expected local demand is keeping stockists at bay. Limited buying pulled down mill tender rates too by Rs 10-15 a quintal. Morale was weak. Sugar prices have been falling since Friday.

Mr Harakhchand Vora of Kavita Trading Co. said the Government has declared a free sale quota of 17 lakh tonnes for this month and till now mills have not sold expected quantity because of low demand. Even upcountry buying is absent. Maharashtra's mills have got almost double non-levy quota for this month. Limited local/upcountry demand and sufficient stocks at the Vashi market kept traders restrain from fresh buying.

Sugar prices have come down by Rs 120 in the ready market and crashed at the mill level by about Rs 150 a quintal so far this month. Further decline is possible, he added.

Mr Mukesh Kuwadia, a wholesale trader, said in the first fortnight in absence of fresh demand mills sold about less than half of the quantity expected. On Monday evening, about 13-15 mills came forward with tender offer and sold only about 25,000-30,000 bags at Rs 2,730-2,770 a quintal for S grade and Rs 2,780-2,830 a quintal for M grade. Because of poor response most of the tenders were kept open. Arrivals at the Vashi market were about 40-42 truck loads (of 100 bags) and local dispatches were about 33-35 truck loads.

According to Bombay Sugar Merchants Association, spot rates were: for S grade Rs 2,861-2,901 (Rs 2,881-2,921) and M grade Rs 2,891-2,951 (Rs 2,906-2,981). Naka delivery rates were: for S grade Rs 2,830-2,850 (Rs 2,830-2,870) and M grade Rs 2,870-2,900 (Rs 2,880-2,930).

Published on January 21, 2011

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