Sugar slips further on poor offtake

Sugar prices on the Vashi wholesale market declined further by Rs 10 a quintal on Tuesday at the spot level, and by Rs 10-20 at naka delivery.

Continued lack of demand and selling by mills weighed on the market sentiment, making it bearish. Mills are trying to reduce the burden of the current month's higher quota of 17 lakh tonnes by reducing the rates but are not getting the expected response from the buyers.

Mr Jagdish Rawal of B. Bhogilal and Co said higher quota was increasing the pressure at the mill level with the due dates nearing, but less than expected local demand kept stockists at bay for fresh buying, increasing the stock burden for producers.

Mill tender rates on limited buying declined by Rs 10-15 a quintal. Sugar prices since last Friday have been declining continuously. Upcountry buying was also absent.

Sufficient inventory on the Vashi market at about 50-60 truckloads kept traders at bay, as fresh buying may lead to further decline in sugar price.

On Tuesday evening about 14-15 mills came forward with tender offers and sold only about 75,000- 80,000 bags of sugar in the range of Rs 2,720-2,770 for S-grade and Rs 2,780-2,820 for M-grade a quintal.

Some mills seized the offer, while others kept tender offers open. There was talk of some buying by upcountry traders in rail rake quantity.

Arrivals at the Vashi market were lower at about 38-40 truckloads (each 100 bags) and local dispatches were about 30-32 truckloads. Lower demand has increased the market inventory, forcing traders to sell at lower price. There was no change in freight rates.

According to the Bombay Sugar Merchants Association, sugar rates were: Spot: S-grade Rs 2851-2,891 (Rs 2,861-2,901) and M-grade Rs 2,892-2,951 (Rs 2,891-2,951). Naka delivery rates: S-grade Rs 2,820- 2,850 (Rs 2,830-2,850) and M-grade was Rs 2,850-2,900 (Rs 2,870-2,900).