Buyer resistance drags spot sugar

Sugar prices ruled almost steady on Monday after witnessing some upside momentum last week.

Spot prices slipped by Rs 5-7 a quintal again on buyer resistance in tandem with slightly weak naka rates. Mill tender rates were expected to be Rs 4-5 higher. Price decline was limited to S grade as early month retailer demand eased along with selling pressure by mills.

Arrivals and dispatches were at the usual level. Last week, the market was closed for half of the days due to festivals, but morale was positive today due to absence of any reason to trigger a definite direction.

Morale was steady and all eyes were on how the mill sector would sell and how the buyers would respond in the evening, said a wholesaler in Vashi market.

Mr Hemant Vora of Kavita Trading Co said due to higher production this year sugar prices are ruling weak-to-range-bound this month.

As most of the crushing season is now over and next month the season will end with an estimated total production of 245-250 lakh tonne, which will be higher than local consumption needs. There is sufficient supply from mills keeping the market price under check since January.

With the increasing temperatures, demand for sugar will also rise but given the supply position, there will be no big and sudden jump in price, he added.

Mr Jagdish Rawal of B. Bhogilal and Co also felt the same way and said, in Uttar Pradesh crushing was almost over.

The State produced about 59-60 lakh tonnes of sugar till now. Likewise Maharashtra is expected to produce more than 91-92 lakh tonnes this year.

In the absence of any concrete decision on sugar exports, producers are now forced to off load produce in local markets.

Talk of losses and sugar cane dues are doing the rounds and mills feel the present market price is not very attractive.

Due to summer season demand, local and upcountry markets are witnessing active business volume. Inventory buying sentiment is also gripping the stockists. Also decreasing the stocks before monsoon to avoid any losses/damage will weigh the sentiment.

On Saturday, despite being a holiday, about 10-12 mills sold about 75,000-80,000 bags (100 kg each) sugar in the range of Rs 2,630-2,680 for S grade and Rs 2,690-2,760 for M grade to State level buyers.

In Vashi market, arrivals were about 44-45 truck loads (each of 100 bags) and local dispatches were 38-40 truck loads.

Bombay Sugar Merchants Association sugar rates:

Spot rates: S grade Rs 2,766-2,815 (Rs 2,751-2,821) and M grade Rs 2,801-2,901 (Rs 2,791-2,901).

Naka delivery rates: S grade Rs 2,720-2,760 (Rs 2,730-2,750) and M grade was Rs 2,780-2,860 (Rs 2,765-2,860).

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