Talk of removal of stock limits lift sugar

Our Correspondent Mumbai | Updated on June 21, 2011


Sugar prices bounce back on Tuesday as futures markets firmed and talk of the Centre doing away with stock limits because producers have built up huge stocks boosted sentiment.

Price rose by Rs 18-20 a quintal at the upper level. In the spot market, prices rose by Rs 10-12 due to limited demand. At naka and mill-tender levels, price increase was higher. Volumes rose on higher demand form stockists.

Sources in the Vashi market saidmills have sold good amount of sugar till now as local demand remains steady. Free-sale quota for this month is 16.50 lakh tonnes, less than May when it was 17.50 lakh tonnes. The trade expects the Union Government may remove limits on stocks — 2,000 bags for traders at present. Removal of limits will encourage more buying and storing.

Local demand may remain subdued till month-end and arrest rise in prices. Gains in futures of Rs 30-35 supported the market. Talk of the Government removing caps on stocks may have improved buying, but it is not in favour of more exports until September. On Monday, 28-30 mills offered tenders and sold about 1.4-1.5 lakh bags of a quintal each at Rs 2,450-2,500 for S-grade and Rs 2,510-2,640 for M-grade to local traders. Arrivals were at 50-51 truck loads of 100 bags each, and local dispatches were lower at 47-48 truck loads.

Bombay Sugar Merchants Association's spot rates: S-grade Rs 2,601-2,651 (Rs 2,586-2,651) and M-grade Rs 2,651-2,801 (Rs 2,641-2,801).

Naka delivery rates: S-grade Rs 2,570-2,600 (Rs 2,540-2,590) and M-grade Rs 2,620-2,770 (Rs 2,610-2,700).

Published on June 21, 2011

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