Sugar prices for S-grade declined by Rs 5-10 a quintal on selling pressure at mill-level due to month end and need-based demand from traders/stockists on Monday.

On the Vashi wholesale market, arrivals exceeding demand increased inventories significantly. The sentiment was weak due to thin demand and selling of resale delivery order at a price Rs 5/10 lower than mills' offering, said traders.

Mr Jagdish Rawal of B. Bhogilal and co said month-end selling pressure at mill-level was mounting, as mills need to sell the allocated quota for the period. As in January and February, this month, too, it appears that mills are not able to sell full allocated quantity due to limited demand. For the current month, the Government has declared total 16.84 lakh tonnes under the free sale quota, including 3.50 lakh tonnes of carry-over from February. This month again, some quantity is likely to be in unsold. The positive mood of the recently announced five-lakh-tonne export permission has proved short-lived. Increase in stock holding limits also proved ineffective due to absence of demand.

Everything depends on the new quota, said trade sources.

On Saturday, 14-15 mills came up with tender offer and sold about 55,000-60,000 bags in the range of Rs 2,675/2,695 for S-grade and Rs 2,710/2,750 for M-grade. Lower than expected demand/buying support is forcing most mills to keep the tender offer open. Sugar prices in other producing centres are also weak. Arrivals at the Vashi market were higher at 60-65 truckloads (100 bags each). Local dispatches were lower at 50-52 truckloads, leading to increase in inventory.

Bombay Sugar Merchants Association sugar rates were : Spot rates: S-grade Rs 2,788/2,831 (Rs 2,791/ 2,841) and M-grade Rs 2,831/ 2,921 (Rs 2,831/ 2,921).

Naka delivery rates : S grade Rs 2,750/ 2,780 (Rs 2,760/2,780) and M grade was Rs 2,795/2,870 (Rs 2,800/2,870).

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