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Sugar prices at the Vashi spot market declined by Rs 10-15 a quintal on Wednesday, as the market came under fresh selling pressure on account of the expiry of the current month's free sale quota this weekend.
Talk of a higher free sale quota for August was a contributor to today's decline. Naka rates decreased by Rs 10-20 a quintal due to increased pressure on stockists to lift sugar from mills. Mills' tender rates were steady as they have offloaded most of the current month's quota, a leading wholesaler said. The tenders for August 5-10 by mills indicate that they are not under pressure to lift the current month's balance quota. All are eagerly waiting for the announcement of the new month's quota, with most traders expecting a higher quota for August, since the festival season begins from next month.
Mr Harakhchand Vora, Vice-President, Bombay Sugar Merchants' Association told Business Line : “Considering the festival months ahead (from August onwards) and continued buying support of consumers, demand will not allow prices to go down from the present level. This week, very few mills have offered tenders, which indicate that most have completed their sales against the allotted quota/quantity. The market may witness high volatility based on rumours of the August quota. Once the August quota is announced, market will get a clear direction based on quantity.”
Rumours of 15.50 -16 lakh tonnes free sale quota for August weighed on physical and futures markets sentiment. Sugar futures declined sharply by Rs 75-80a quintal, said a wholesaler.
With fewer mills offering tenders on Tuesday, the volume was also thin. Local demand was also less due to the month-end. On Monday, only five to six mills offered tenders, and sold a small quantity of 18,000-20,000 bags (100 kgs each) to local buyers in the range of Rs 2,690-2,740 (Rs 2,690-2,740) for S-grade and Rs 2,750-2,830 (Rs 2,750-2,850) for M-grade sugar.
Arrivals at the Vashi market was lower at 38-40 truckloads (each 100 bags) and local dispatches were 42-43 truckloads. The Bombay Sugar Merchants Association sugar rates were : Spot: S-grade Rs 2,801-2,846 (Rs 2,816-2,856) and M-grade Rs 2,856-2,991 (Rs 2,866-3,001).
Naka delivery rates : S-grade Rs 2,740-2,780 (Rs 2,750-2,800) and M-grade Rs 2,800-2,940 (Rs 2,850-2,960).
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