Commodities

Sugar turns bitter on poor demand

Our Correspondent Mumbai | Updated on January 26, 2011

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Spot sugar prices at Vashi market on Tuesday erased the previous day's rise of Rs 15-20 on increased selling pressure at naka and mill delivery level. Because of the lack of demand, prices declined by about Rs 150-160 a quintal.

Month-end lower local demand and expectations of new month's free sale quota kept volume normal. Prices and morale were steady. Sugar price at Vashi market was under pressure because of the poor local and upcountry demand and selling by mills to finish the current month's allotted quota before the time limit. The Government has declared 17 lakh tonnes of free sale quota for the current month. Mills are not keen to sell at lower price hence prices may settle down at present level. Secondly, as fresh advance buying by stockists was very limited, price may see a bounce back when demand rises. There is talk about extension for current month's quota or lower quota for the new month. Traders are now eagerly waiting for an announcement by the Government.

On Monday evening about 12-15 mills came forward with tender offer and sold about 30,000-35,000 bags of sugar at Rs 2,720-2,750 a quintal for S grade and Rs 2,740-2,800 a quintal for M . As response was poor, most of the mills kept tender offer open. Arrivals in the Vashi market were lower at about 38-40 truck loads (each of 100 bags) and local dispatches were about 32-35 truck loads. According to the Bombay Sugar Merchants Association, spot sugar rates were: S grade Rs 2,831-2,881 (Rs 2,851-2,882) and M grade Rs 2,871-2,931 (Rs 2,881-2,921). Naka delivery rates were: S grade Rs 2,790-2,830 (Rs 2,810-2,840) and M grade Rs 2,820-2,880 (Rs 2,850-2,890).

Published on January 26, 2011

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