Spot sugar prices on the Vashi wholesale market extended loss by Rs 10-15 a quintal on Tuesday. Naka and tender rates also declined by the same margin on selling pressure. Prices for S-grade at mill tenders fell below the level of Rs 2,600 a quintal for first time this year, said traders.

Continued selling by mills to exhaust this month's free sale quota and a hand-to-mouth buying by retailers kept the volume stagnant and the sentiment weak.

At the current low price level, sugar mills may not sell according to market expectation to avoid making losses. A wholesaler of Vashi market said that the pressure to exhaust the free sale quota before the due date led to desperate selling by mills. Higher arrivals compared with lower local dispatches lead to increased inventory.

According to traders, due to low demand since the second week of this month, inventories increased to about 7,000-7,500 bags.

He further said that production for current season is also expected more than 250 lakh tonnes.

On Monday evening, nearly 20-22 mills offered tenders and sold about 38,000-40,000 bags (100 kgs each) to local stockists in the range of Rs 2590-2630 for S-grade and Rs 2650-2720 for M-grade. Mills tenders were open. In Vashi Market, arrivals were higher at about 50-52 truckloads (each 100 bags) and local dispatches were 46/47 truckloads.

The Bombay Sugar Merchants Association sugar rates were : Spot: S-grade Rs 2,731-2,800 (Rs 2,731-2,810) and M-grade Rs 2,746-2,886 (Rs 2,771-2881).

Naka delivery rates : S-grade Rs 2,690-2,730 (Rs 2,710-2,740) and M-grade Rs 2,750-2,830 (Rs 2,740-2,850).

Related Topics