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Sugar prices extended loss on Thursday with a further decline of Rs 20-25 at the upper naka and tender level. In the absence of any positive reason, the overall sentiment continued to be weak, said traders.
At the domestic level, all main markets were showing bearish mood, as sugar futures prices under expectation of higher production and inventory stocks, ruled weak for long. In the last three months, sugar future prices lost more than Rs 400 a quintal, compared to a decline of Rs 150-200 in the physical market. Considering the high cost of production and lower rates, producers are hesitant to sell below the parity. The market is already ruling at the bottom price. The physical market has been witnessing need-based demand from the beginning of the current year on expectation of higher sugar production. With the end of the crushing season this month, some improvement (in demand and price) in market may be seen, but heavy stocks with the producers again weigh on sentiment. The market is awaiting a concrete reason for improvement. Exports
This year, the Government has declared 5 lakh tonne sugar exports but due to the decline in world market price, response for registration of exports is still not impressive. However, in the last one month, world sugar prices have improved. During the period, white sugar prices have gone up from $580 to $670 a tonne on Tuesday.
Sentiments in other producing/main consuming centers were also bearish due to the absence of any supportive reason, said the wholesalers of Vashi market. Mills are carrying good amount of sugar stocks. A sharp decline in sugar futures price also weighed on sentiment. Arrivals and dispatches were at the usual level. Mills are not very keen to sell at lower price due to disparity and most of them kept tender offer open. On Tuesday, about 24-25 mills sold 40,000-42,000 bags of sugar (100 kg each) in the price range of Rs 2,505-2,540 for S grade and Rs 2,565-2,620 for M grade. Arrival in the market was 44-45 truck loads (each 100 bags) and local dispatch was about 40-42 truck loads.
Bombay Sugar Merchants Association sugar rates:
Spot rates: S grade Rs 2,661-2,702 (Rs 2,671-2,712) and M grade Rs 2,711-2,831 (Rs 2,716-2,841).
Naka delivery rates: S grade Rs 2,600-2,640 (Rs 2,625-2,640) and M grade was Rs 2,660-2,710 (Rs 2,670-2,770).
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