Sugar mills under pressure to clear stocks

Sugar prices witnessed a steady decline for the fifth consecutive day taking total loss of Rs 50-80 a quintal at mill level this week.

The spot market was under pressure due to weak physical demand. Prices fell by Rs 5-10 a quintal in the ready market, while naka rates dropped by Rs 10. Mill tender rates dropped by Rs 10-15 due to lack of demand. Mills are under pressure to liquidate stocks and continued selling at lower rates. A wholesaler said that local demand dried up as the month-end is approaching. Due to continuous selling by mills, supply in local markets is higher than demand. The Vashi wholesale market presently has stocks of 100 truckloads (each of 100 bags). As demand is poor, traders are not in a mood to buy.

Arrivals and local dispatches remained routine. Domestic sugar futures were bearish.

There is no buying from neighbouring States in Maharashtra. Hence there is fear of further mounting stocks at upper level. Lifting of sugar by stockists from mills is slow adding more pressure on market sentiment. Mills have to sell a good amount of stocks from the free sale quota of 46 lakh tonnes declared by Government for the April – June quarter.

At Vashi market, arrivals were 52-53 truckloads and dispatches were 48-50 loads.

On Thursday 15-16 mills sold about 28,000 – 30,000 bags in the range of Rs 2,790-2,850 (Rs 2,800-2,850) for S-grade and Rs 2,850-2,940 (Rs 2,860-2,940) for M-grade.

The Bombay Sugar Merchants Association's spot rates: S-grade Rs 2,932-2,981 (Rs 2,932-2,991) and M-grade Rs 3,000-3,151 (Rs 3,000-3,161).

Nakadelivery rates: S-grade Rs 2,890 -2,940 (Rs 2,900-2,950) and M-grade Rs 2,970-3,050 (Rs 2,970-3,050).

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