Commodities

Sugar range-bound on steady suppply

C. K. Jani Mumbai | Updated on May 10, 2011 Published on May 10, 2011

sugar

Spot sugar prices at Vashi market declined by Rs 5-7, tracking the steady demand-supply position on Tuesday. Naka and mill tender rates were unchanged as producers got good response to their tender offer with the usual volumes.

Good quality sugar was in demand, and freight rates ruled steady. At the mill level the sentiment was firm on expectation of fresh demand from upcountry to pick up. The morale was steady in the physical market as the volumes were tight.

Mr Harakhchand Vora, Vice-President, Bombay Sugar Merchants' Association, said “very limited buying sentiment in the physical market due to summer vacation kept the price range-bound. Lack of buying in the neighbouring States in the last two days and higher arrivals did weaken the spot market sentiment.

Mills are continuously selling at the current price level. There is no supply crunch and distribution centres are replete with stocks. As the crushing season is coming to end next month and with expected higher production of 245-250 lakh tonnes, traders are expecting the Central Government to grant permission to export more sugar. Till now, the Government has issued export orders for 9,2000 tonnes to mills out of the 5 lakh tonnes allowed under the Open General Licence (OGL) in March 2011 and notified on April 19, 2011.

Maharashtra is expected to crush a total of 810 lakh tonnes of sugarcane in the current season. As per data from the sugar industry, in the current year (till April 2011) total sugar production is higher at 226 lakh tonnes compared to 181 lakh tonnes last year. Maharashtra produced 83 lakh tonnes (67.70), Utter Pradesh 59 lakh tonnes (51.70) and Karnataka 34.50 lakh tonnes (24).

In the Vashi-Mumbai market, loading and unloading were limited. The arrivals were higher than dispatches. Most of the mills kept the tender offers open. Some 24 mills sold about 85,000-88,000 bags (100 kg each) of sugar to local/State-level stockiest at Rs 2,635-2,685 for S grade and Rs 2,690-2,770 for M grade. Arrivals in the market were 50-52 truckloads (each of 100 bags), and local dispatches were lower at 47/48 truck loads.

Bombay Sugar Merchants' Association rates: Spot rates: S grade, Rs 2,756-Rs 2,781 (Rs 2,760-2,791); and M grade, Rs 2,801-2,901 (Rs 2,801-2,911).

Naka delivery rates: S grade, Rs 2,720-2,750 (Rs 2,720-2,750); and M grade, Rs 2,760-2,865 (Rs 2,760-2,865).

Published on May 10, 2011
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