Spot sugar prices on the Vashi wholesale market ruled slightly weak on Thursday on hand-to-mouth retail buying. In the ready market, M-grade sugar declined Rs 4-5 a quintal and S-grade was unchanged. The steady trend in Naka and mill tender rates extended for the third consecutive day despite less-than-expected demand. Local buying was limited.

Prices may fall in the coming days, said wholesalers.

Mr Hemant Vora of Kavita trading Co. said need-based buying by retailers kept spot rates down by Rs 5 a quintal. Selling by millers to exhaust this month's free-sale quota ensured ample supplies. Besides, lower demand from retailers and lack of buying by neighbouring States cooled the market sentiment and kept volumes stagnant. Mills were also hesitant to sell at the current price due to high cost.

Hence, most mills kept their tender offers open. Few mills came with tender offers on Wednesday and response from buyers was poor. The Government's notification for export of five lakh tonnes of sugar did not have any impact as it has been discounted by the trade. India's sugar production is expected higher at 245-250 lakh tonnes for the 2010-11 season (October-September) from 190 lakh tonnes previous year. The annual demand is pegged at 220-225 lakh tonnes.

On Wednesday evening, only 5-6 mills offered tenders and sold less than 10,000 bags of a quintal each at Rs 2,625-2,680 for S-grade and Rs 2,680-2,760 for M-grade. Most of the mill tenders were open. In the Vashi Market, arrivals were about 44-45 truckloads of 100 bags each, and local dispatches were at 33-34 truckloads.

Bombay Sugar Merchants Association's spot rates: S-grade – Rs 2,752-2,810 (Rs 2,752-2,810); and M-grade – Rs 2,791-2,901 (Rs 2,796-2,901).

Nakadelivery rates: S-grade – Rs 2,720-2,750 (Rs 2,720-2,750); and M-grade – Rs 2,770-2,850 (Rs 2,770-2850).

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