Spot sugar prices dropped further by Rs 10-15 a quintal on Monday tracking weak futures and lower demand. In Vashi, the agricultural produce marketing committees shut down for a day in support of the ongoing indefinite bandh called by grain markets. Mill tender rates fell by Rs 10-20 a quintal, as stockists bought less on Saturday. Futures on the National Commodities and Derivatives Exchange (NCDEX) were down Rs 15-17 a quintal till noon, biggest fall in nearly a month, on talk of the Union Government extending the period for mills to sell sugar on the open market to four months of one. The talk was that mills would have to sell about 70 lakh tonnes of non-levy sugar between December and March.
Mills can sell quota anytime in the four months, said Bombay Sugar Merchants Association President Ashok Jain.
Lack of retail demand and poor buying by neighbouring States has forced Maharashtra mills to offload in the local markets, a wholesaler said. However, local demand has come down after Diwali. Markets in Vashi currently have about 100 truckloads. On Saturday, tenders offered by a few Maharashtra mills did not get a good response.
A commodity analyst said considering monthly requirement of 17-18 lakh tonnes, the 70 lakh tonnes quota should be sufficient. But before that, mills have to offload 40 lakh tonnes of non-levy quota declared for October-November before the month ends.
December contracts on the NCDEX were down to Rs 3,292 (Rs 3,308), January to Rs 3,300 (Rs 3,314) and February to Rs 3,315 (Rs 3,332).
Arrivals in Vashi were not unloading as the markets were closed. On Saturday evening, five to seven mills offered tenders and sold less than 10,000 bags (each of a quintal) to local traders at Rs 3,300-3,370 (Rs 3,310-3,380) for S-grade and Rs 3,340-3,450 (Rs 3,350-3,450) for M-grade.
Nominal spot rates: S-grade Rs 3,415-3,510 (Rs 3,421-3,512) and M-grade Rs 3,480-3,700 (Rs 3,492-3,721).
Nakadelivery rates: S-grade Rs 3,360-3,410 (Rs 3,370-3,420) and M-grade Rs 3,410-3,480 (Rs 3,430-3,500).