Commodities

Sugar dips below Rs 2,800/quintal

Our Correspondent Mumbai | Updated on February 10, 2011

A retail shop selling sugar (file photo)   -  THE HINDU

On Thursday, for the first time this calendar year, spot sugar prices at the Vashi market declined below Rs 2,800 a quintal for S-grade. Spot prices came down by more than Rs 20 a quintal on heavy selling by mills at lower rates, due to very weak demand. Naka and mill tender rates dropped sharply by Rs 25-30 a quintal. Mills continue to keep tender offer open to offload current month's free sale quota.

Despite reduced rates there is no sign of improvement in local demand. Mr Jagdish Rawal, a wholesale trader, said that on Thursday selling pressure of stockists for February 10 due date weighed on the sentiment at the naka-tender delivery trade. The absence of fresh local/upcountry demand, not only in Mumbai but also in other consuming States such as Gujarat, Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal, led to an overall bearish mood in all the centres.

The sugar market is has been witnessing bearish trends since last month. This month, till now, the spot sugar prices have come down by Rs 40-50 at the spot level but the decline in mill tender rates has been more, at Rs 60-70 a quintal.

In a high food inflation scenario, consumers are lucky to get sugar at reasonable rates compared to other food items. Volume in the market is need-based, keeping bulk buyers away from inventory buying, Mr Rawal added.

On Wednesday evening about 14-15 mills came with tender offer and sold about 30,000-32,000 bags of sugar at Rs 2,640/2,670 a quintal for S-grade and Rs 2,680-2,720 for a quintal of M-grade.

Most of the mills kept tender offer open to attract buyers. Arrivals in the markets were 35-38 truckloads (each of 100 bags) and local dispatches were 34-35 truckloads, which kept market inventory at high levels.

Bombay Sugar Merchants Association rates: Spot rates: S-grade, Rs 2,801-2,831 (Rs 2,801-2,845); and M-grade: Rs 2,826-2,886 (Rs 2,846-2,916).

Naka delivery rates: S-grade: Rs 2,725-2,750 (Rs 2,750-2,770); and M-grade: Rs 2,760-2,810 (Rs 2,800-2,845).

Published on February 10, 2011

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