Spot sugar price market at Vashi market decline by Rs 10-15 a quintal on Monday, despite support of fresh retail demand. Naka rates were steady. Tender rates lose Rs 10-15 on selling pressure.

The Government has declared higher free sale quota of 16.50 lakh tonnes for June-11 (For May -11 was 17.50 lakh tonnes) on last Friday. Traders / stockist believe that quota is higher considering monsoon month and a lack of demand from neighbouring States. Overall, moral was weak but calculating parity traders believe that price may not go down sharply form current level. Keeping month beginning improved fresh retail buying.

Mr Jagdish Rawal, Joint Secretary of Bombay Sugar Merchants Association, told Business Line : “After announcement of sugar quota for June 11 last Friday prices came down by Rs 40-50 a quintal till now and considering high cost of production of sugar, it seems that prices will not go down below the current level. Present price level at mill level is lowest in the current year. Between January and April under inventory stock pressure and lack of demand, sugar price has not gone below Rs 2,600 at mill level. Secondly, the Government has not announced any extension of time limit for unsold / balance quota of current month, means mills have to sell entire quantity within time frame till month end which added the selling pressure at producing level.”

Another wholesaler said, one side selling pressure for current months free sale quota will continue for one two days more in absence of extension for time limit on the other side fresh retail demand expected to rise for month beginning period and end of vacation. Higher production of sugar in current season arresting buying of other States in Maharashtra.

Sugar production in India is estimated to rise to 245 lakh tonnes in the 2010-11 season (October-September) from 190 lakh tonnes in the previous year. The country's annual demand is pegged at 220 lakh tonnes, he said.

Meanwhile, freight rates were steady at higher level as shortage of trucks still continued. Arrivals and dispatches in Vashi market also improve on support of retail demand. On Saturday, about 20-22 mills have sold about 48,000-50,000 bags of sugar (100 kg each) in the price range of Rs 2,535-2,570 for S grade and Rs 2,575-2,640 for M grade. Mills were offering tenders at same rate today. Arrival in the market was 58/60 truck loads (Each of 100 bags) and local dispatch was 55/56 truck loads.

Bombay Sugar Merchants Association sugar rates:

Spot rates: S grade Rs 2,691 / Rs 2,732 (Rs 2,703 / Rs 2,741) and M grade Rs 2,731 / Rs 2,851 (Rs 2,746/ Rs 2,851).

Naka delivery rates: S grade Rs 2,650/ Rs 2,680 (Rs 2,650 /Rs 2,680) and M grade was Rs 2,680 / Rs 2,730 (Rs 2,680 / Rs 2,730).

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