Sugar prices dropped sharply by Rs 45-50 a quintal in the spot market and naka delivery in Maharashtra on Wednesday. Mill tender rates declined by Rs 30-40 as freight rates weakened after transporters called off their strike on Tuesday night.

According to traders, the local demand was good, thanks to festival buying by retailers.

In other States, including Madhya Pradesh, Gujarat and Karnataka, prices came down but not as sharply as in Maharashtra since the transporters' strike affected them only partially. According to sources, freight rates dropped as more trucks were available at the producing centres. Further, mills continued to sell at the current market rates to exhaust their monthly quota. Arrivals in the market were lower than demand, but are expected to increase from Thursday.

Demand will also rise during the 11-day Ganeshotsav festival that starts on September 1. Hence, sugar prices are not expected to see a big drop.

With the transporters' strike being called off, half of the Rs 100 price gain was washed out on Wednesday alone. Still, there is room for a further Rs 40-50 decline, but that will be at a slower pace.

Once supply becomes smooth, shortage-based movement in the futures market will be curbed, sources added. On Wednesday, arrivals in the market were steady at 28-30 truckloads (each 100 bags of 100 kg) and local dispatches were38-40 truckloads. Some selling pressure may be seen at the mill level this week being the month-end. On Tuesday evening, 18-20 mills sold 65,000-70,000 bags through tender offer to local traders in the range of Rs 2,630-2,670 (Rs 2,650-2,700) for S-grade and Rs 2,690-2,750 (Rs 2,710-2,780) for M-grade.

Bombay Sugar Merchants' Association spot rates were: S-grade Rs 2,781-2,845 (Rs 2,826-2,905) and M-grade Rs 2,811-2,961 (Rs 2,846-3,031).

Nakarates : S-grade Rs 2,720-2,750 (Rs 2,760 –2,800) and M grade Rs 2,770-2,870 (Rs 2,820-2,900).

comment COMMENT NOW