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Sugar prices declined by Rs 8-10 in spot and naka delivery level and lost Rs 10-15 a quintal at the mill level on routine local demand on Monday.
Weak futures prices also weighed on sentiment in the absence of any supportive factors. The market trend will depend on how the demand supports this week. World sugar markets last week closed lower after witnessing four days of continuous rise, said traders.
A wholesaler said no major announcements for the sector were made by the Finance Minister in the Budget except a few steps – extension of tax holidays, reduction of withholding tax being extended to power projects, reduction in basic custom duty for sugarcane plant and harvesting machines – which may aid the industry indirectly.
Hence the sugar industry and market remained almost untouched by the Budget, at least for a now.
Speaking about the local market condition, he said routine retail and month-end demand kept volume arrested at upper and retail level. Higher production and absence of buying by neighbouring States in Maharashtra kept producers under pressure. This lead to a ample supply in markets. Bulk consumers were also quiet but they may start buying soon with the onset of summer.
In Vashi market, demand-supply remained stable despite being the first day of the week.
Stockists were not in a mood to bet for fresh inventory building. They are now eagerly waiting for announcement of new month free sale quota. For January, February and March, the Government has reduced the monthly free sale quota to stabilise prices.
Market trend will now depend on local demand till the month-end while free sale quota will lead the trend in March, he said.
In the world market, sugar prices closed slightly lower on last Friday. Sugar May-12 futures closed at $666.60 ($670.00) and August-12 futures at $641.60 ($643.00). Arrivals in Vashi market were about 52-53 truckloads and dispatches were about 49-50 loads.
On Saturday evening, about 15-16 mills sold about 38,000-40,000 bags sugar in the range of Rs 2,710-2,780 (Rs 2,710-2,785) for S-grade and Rs 2,800-2,890 (Rs 2,810-2,900) for M-grade.
Bombay Sugar Merchants Association's spot rates: S-grade Rs 2,862-2,946 (Rs 2,862-2,952) and M-grade Rs 2,981-3,042 (Rs 2,956-3,051). Naka delivery rates: S-grade Rs 2,800-2,850 (Rs 2,800-2,850) and M - grade Rs 2,930-3,000 (Rs 2,936-3,000).
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