Sugar prices at the Vashi market continued to rule weak on thin, need-based local demand and continued selling by mills. On Monday, spot prices declined by Rs 5-8 a quintal. Mills' tender rates further weakened by Rs 5-10 on limited buying support. Naka rates rule steady on absence of resale selling. Morale was weak.
Mr Roshan Murgai of Sugar supply Co., a wholesale trader, said mills are having a hard time at current prices, as they buy sugar at Rs 2,650-2,700 a quintal. If the rates go down further, it will badly affect them. Last month, mill tender rates for S-grade dipped to Rs 2,620-2,630. Now, with the hope of an increase in consumption demand for Holi this week and expectation of increase in bulk demands because of summer, sugar prices are expected to stabilise at the present level with range-bound movement. As demand has remained poor for a long time now, volumes have stagnated. Most of the consuming markets don't have large stocks, so prices may go up once the demand inproves.
In West Bengal side, because of a shortage of rail rakes, sugar prices firmed up. India's sugar production is expected higher by 55-60 lakh tonnes this year to 245-250 lakh tonnes, compared to 190 lakh tonnes last year. For the current month, the Government has declared 18.86 lakh tonnes as sugar quota, including 2.02 lakh tonnes levy and 3.5 lakh tonnes carryover stocks from last month. Arrivals were at the usual level of 47-48 truck loads (each of 100 bags), and local dispatches were at 43-44 truck loads. About 14-15 mills offered tenders on Saturday, and sold about 45,000-50,000 bags (of a quintal each) at Rs 2,645-2,690 for S-grade and Rs 2,695-2,745 for M-grade. Most mills kept tender offers open, as they were not keen to sell at lower prices.
Bombay Sugar Merchants Association's spot rates: S-grade Rs 2,786-2,835 (Rs 2,791-2,851) and M-grade Rs 2,826-2,901 (Rs 2,831-2,901).
Nakadelivery rates: S-grade Rs 2,750-2,770 (Rs 2,750-2,770) and M-grade Rs 2,800-2,840 (Rs 2,780-2,850).