Sugar prices ruled steady on Monday after declining sharply last week. Good quality sugar increased Rs 5-10 a quintal and routine quality dropped further by Rs 10 in the physical market.

To reduce selling pressure of stockists, naka prices improved Rs 10/Rs 20 a quintal.

Mill tender rates were steady as mills were not very keen to sell at lower levels.

Most mills kept tender offers open. The volume was as usual but less than expected. According to the Government's latest estimate, sugarcane has been planted on 50.61 lakh hectares till June 3 compared with 48.63 lakh hectares in the same period last year. Acreage was up by 1.98 lakh hectares.

Wholesalers said higher sugar quota for the month, selling pressure from mills and need based demand resulted in sugar prices falling Rs 60-70 in the spot market to below Rs 2,700 and below Rs 2,500 at mill level for S-grade. Inventory building is not happening because of less than expected local and upcountry demand. In Kolhapur, Karad and Sangli shortage of trucks resulted in freight rates firming up Rs 5-7 a bag, supporting firm sentiment and restricting dispatches to domestic markets.

Other side mills are also not very eager to sell at lower prices as it will lead to more losses. Volumes may turn stagnant as retail/ consumption demands will ease once school and colleges reopen, say traders. Monsoon is likely to keep buyers away. However, with the end of crushing season this month some improvement (in demand and price) may be seen. In the global market, in the last one month white sugar prices have gone up from $580 to $693 a tonne on Friday. Sentiment in other producing / main consuming centres was steady at lower levels, he added.

On Saturday, about 27-28 mills sold 48,000-50,000 bags (100 kg each) of sugar in the price range of Rs 2,485-2,530 for S-grade and Rs 2,535-2,590 for M-grade. Arrivals in the market were 48-50 truck loads (each 100 bags) and local dispatch was about 44-46 truck loads.

Bombay Sugar Merchants Association's spot rates : S-grade Rs 2,631-2,696 (Rs 2,641-2,692) and M-grade Rs 2,676-2,851 (Rs 2,686-2,831).

Nakadelivery rates : S-grade Rs 2,590-2,620 (Rs 2,570-2,610) and M-grade Rs 2,640-2,720 (Rs 2,630-2,695).

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