Sugar prices extended gains by Rs 20-25 a quintal at the mill level for the second day on Wednesday on expectations the Government will allow additional export of sugar.

A bull run in the futures market on speculative buying, helped by the active participation of operators, has changed the overall sentiment. The local market's pipeline is empty as most of the volume this month is need-based. Ready and naka level prices were up marginally by Rs 10-12 due to less-than-expected local demand. Volumes were at routine levels. Sources at the Vashi market said sugar prices have witnessed a sharp rise from their lowest levels of the year, in the last two days, following the bullish trend in the futures markets and expectations of a removal of stock limits. On Wednesday, talk that the Government may allow more exports further fuelled sentiment. Fresh buying inquiries also increased in Maharashtra this week. Two-three rail rakes (each 27,000 bags of 100 kg) were bought by eastern side buyers this week.

Sources added that the crushing season is almost over. Till June 21, sugar production in Maharashtra was at 90.29 lakh tonnes against 91-92 lakh tonnes expected during the year. In the international market, sugar prices extended last week's gains by $4.50 to $743.50 ($739) per tonne on Tuesday. In Maharashtra, 27-28 mills have offered tenders and sold about 85,000/ 90,000 bags in the range of Rs 2,460-2,535 for the S-grade and Rs 2,515 / Rs 2,670 for the M-grade to local traders. Arrivals in the market were 48-50 truckloads (each 100 bags); local dispatches were lower at 45-46 truckloads.

Bombay Sugar Merchants' Association's spot rates were: S-grade Rs 2,601-2,651 (Rs 2,601-2,651) and M-grade Rs 2,661-2,811 (Rs 2,651-2,801).

Nakadelivery rates : S-grade Rs 2,560-2,610 (Rs 2,570-2,600) and M-grade Rs 2,625-2,700 (Rs 2,620-2,770).

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