Sugar prices on the Vashi terminal market declined sharply on Thursday on higher resale selling pressure in mill tenders. Mills’ direct tender rates were almost unchanged but in resale it was down by Rs 40-50 a quintal. Routine demand and lifting pressure for July 20 due date, pulled down naka rates further by Rs 50-60, while spot prices dropped by Rs 30-40 a quintal. The Government’s statement on stock limits and export controls to rein in price of essential commodities, including sugar, weakened sentiments.
The Bombay Sugar Merchants Association has written to the Union Government, demanding immediate release of additional free sale quota to meet the festival demand, and a ban on futures trading in essential commodities. As Ramzan, Janmastami, Raksha Bandhan and Ganeshotsav will be celebrated in the current quarter, the quota of 45 lakh tonnes will be short of demand. Hence, prices in the open market may rise further if additional quota is not given.
New crushing season is two months away and the market has to depend on stocks available with producers and market inventory. In the first 17 days, sugar prices in the Vashi market went up by over Rs 350-400 a quintal .
Reselling of mill tenders at Rs 40-50 lower due to lifting pressure for July 20 due date lead to a bearish sentiment . Spot rates have gone up by more than Rs 200 on Monday and Tuesday and some stockists preferred to book profit by reselling. On Tuesday, M-grade prices crossed new high of Rs 3,500, a wholesaler said.
Dry weather is also hurting cane crop. Erratic monsoon will reduce the 2012-2013 sugar output in Maharashtra to 73-75 lakh tonnes, compared to 90 lakh tonnes this year. Karnataka is also faces the same problem. In Vashi market arrivals were 52-54 truckloads and local dispatches were 48-50 truckloads. On Wednesday, about 10-12 mills offered tender and sold 70,000 -75,000 bags (each of 100 kg) in the range of Rs 3,210-3,300 (Rs 3,220-3,300) for S-grade and Rs 3,340-3,400 (Rs 3,340-3,440) for M-grade. This including one rake of 26,000 bags of S-grade was sold to eastern buyers.
The Bombay Sugar Merchants Association's spot rates were (Rs/quintal) : S-grade Rs 3,312-3,382 (Rs 3,352 -3,411) and M-grade Rs 3,370- 3,451 (Rs 3,391- 3,471).
Nakadelivery rates : S-grade Rs 3,280 -3,320 (Rs 3,340 -3,380) and M-grade Rs 3,320-3,380 (Rs 3,370-3,430).