Sugar on a high as demand builds up

Sugar prices on the Vashi wholesale market extended gains by Rs 20-30 a quintal on Wednesday.

The naka rates improved by Rs 30-50 as resale selling pressure eased and mill tender prices increased. Fresh demand from local retailers and buying by the neighbouring States supported the bullish sentiment.

According to traders, talk of a relaxation in stock limits and time limits, additional sugar exports and the end of the crushing season were all supporting the improvement in sentiment.

Buying from Gujarat, Rajasthan and Orissa increased as rates in Maharashtra are cheaper.

Prices have improved sharply in the other producing centres also. The demand from local retailers has improved on higher consumer demand.

Mr Mukesh Kuwadia, Secretary of the Bombay Sugar Merchants' Association told Business Line : “The Government has to be very careful about taking any steps as food inflation is still the major problem for all of us.

With the higher production this year, the Government should first create 50 lakh tonnes of buffer stock and another 50 lakh tonnes as carry-over stock for the next season to control the situation should any negative circumstances arise. Lack of rain in the main producing centres is a big concern. After the announcement of the July free-sale quota last week, sugar prices have increased Rs 130-140."

The onset of the festival season in India from August will boost demand for sugar, he added.On Tuesday, 24-25 mills offered tenders and sold about 65,000-70,000 bags (100 kg each) in the range of Rs 2,665-2,720 (Rs 2,650-2,690) for the S-grade and Rs 2,740-2,820 (Rs 2,720-2,810) for the M-grade.

Arrivals in the market were at 48-50 truckloads (each 100 bags) and local dispatches at 47-48 truckloads.

Bombay Sugar Merchants' Association's spot rates : S-grade Rs 2,761-2,812 (Rs 2,741-2,782) and M-grade Rs 2,816-2,986 (Rs 2,801-2,976).

Nakadelivery rates : S-grade Rs 2,750-2,800 (Rs 2,720-2,750) and M-grade Rs 2,830-2,930 (Rs 2,800-2,950).

COMMENT NOW