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Sugar prices at Maharashtra mills extended gains by Rs 10-20 a quintal on Friday as stockists continued their inventory buying.
With fresh demand support, volumes grew at the mill level for the second consecutive day. Reselling pressure kept naka rates unchanged. Spot rates for S-grade improved by Rs 10 while M-grade prices remained steady on usual retail demand. Expectations of improved local demand and permission for more sugar exports in coming days are keeping the sentiment firm, traders said.
A leading retail broker said in last two days more than three lakh bags (each of 100 kg) sugar were sold by Maharashtra's mills as local traders have started covering, considering lower price level.
Sugar prices have come down by nearly Rs 300 in last six weeks after gaining Rs 350 in November in the physical market.
Foreign market also rebounded with a steady rise, trying to settle above $600. Domestic futures market showed an uptrend. Firm futures market is weighing on spot market sentiment.
At the Vashi market, traders continued to do business on expectation of higher demand in coming days. Buying from neighbouring states is still absent at the upper level; prices may jump if that improves.
Secondly, free sale quota for the current month is lower. Centre has announced free sale quota of 15 lakh tonnes for January, two lakh tonnes lower than December quota.
Arrivals at the Vashi market was 50-52 truckloads and local dispatches were around 49-50 truckloads. On Thursday, 14-15 mills offered tenders and sold about 1.25-1.50 lakh bags in the higher range of Rs 2,760-2,830 (Rs 2,740-2820) for S-grade and Rs 2,850-2,935 (Rs 2,820-2,930) for M-grade.
In world market, a March-12 futures was up by $2.40 to $620.60 ($618.20) while May-12 futures closed higher by $4.10 to $602.30 ($598.20) on Thursday.
Bombay Sugar Merchants Association's spot rates:
S-grade Rs 2,886-3,001 (Rs 2,876-2,995) and M-grade Rs 2,961- 3,092 (Rs 2,961-3,092).
Naka delivery rates: S-grade Rs 2,840-2,900 (Rs 2,840-2,900) and M-grade Rs 2,910-3,050 (Rs 2,910-3,050).
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