Sugar prices at the Vashi market, under pressure of mills selling, continued to decline on Friday.

Mills were offloading / dispatching balance of last month's one lakh tonne carryover stock for which the time limit expires on Thursday. Most of the current month's 16 lakh tonne normal sugar quota is pending, hence, the overall morale / sentiment is weak, said traders.

Mr Harakhchand Vora, Vice-President of Bombay Sugar Merchant Association, told Business Line, “At the producing level, prices further fell by Rs 10/ Rs 15 wherein spot less-than-expected demand keeps prices down by Rs 5/Rs 10. On bearish mood naka rates also declined Rs 10 on higher resale selling. Higher arrivals resulted in increase of inventory in the market and indirectly arrested fresh stock buying.

Dispatches to retailers cooled on lower demand. Thursday being a last day for selling the balance of last month's one lakh carryover stocks, mills were under pressure to offload the stocks. Most of the current month's normal free sale quota of 16 lakh tonne is still pending. Need-based consumer/ retailers' demand will keep mills under pressure to sell maximum quota in the next few days”.

He added, production data of sugar industry up to March 2011, indicate, India's sugar production will be higher than local consumption. To compensate that the only supportive factor is export of sugar, but that matter is still not getting materialised putting more pressure at the producing level and local markets.

Demand in other centres is also not encouraging, keeping Maharashtra's mills to offload sugar in line with local demand to reduce inventory. On the other hand, at the current price level mills are also hesitating to sell to avoid losses, considering high cost of production. With the rise in temperature, some demand support is expected but upcountry buying / rail rake trade is still missing in the State.

On Thursday, about 8 / 10 mills have sold about 75,000 / 80,000 bags (100 kg each) of sugar in the range of Rs 2,620 / Rs 2,650 for S grade and Rs 2,670 / Rs 2,700 for M grade to local stockists. Most of the mills kept tender offer open. Arrivals in the markets today were 44 /45 truck loads (Each of 100 bags) and local dispatches were 38/40 truck loads.

Bombay Sugar Merchants Association sugar rates: Spot rates: S grade Rs 2,766 / Rs 2,820 (Rs 2,771 / Rs 2,825) and M grade Rs 2,810 / Rs 2,911 (Rs 2,815 / Rs 2,911).

Naka delivery rates: S grade Rs 2,720/ Rs 2,740 (Rs 2,730 /Rs 2,750) and M grade was Rs 2,750 / Rs 2,800 (Rs 2,770 / Rs 2,860).

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