Sugar prices on the Vashi wholesale market shot up by Rs 20-25 a quintal on fresh buying interest. This follows the Government decision to remove the cap on sugar exports and placed sugar under the open general licence (OGL) . Domestic sugar futures market took a lead and pushed prices higher, while in the world market , prices declined sharply by $10 a tonne on possible higher supply from India. The sentiment was firm with higher volume, said traders.

Spot rates increased on higher local demand, market sources said. . Retail demand is expected to rise further in the coming days. Naka rates rose by Rs 20-25, while mill tender rates were up by Rs 15-20, as millers quoted a higher price. Sugar production in India during October-11 to April-12 (in Seven months) rose by 11 per cent to 251 lakh tonne compared with 226 lakh tonne in the same period last year, data of Indian Sugar Mills Association showed. Maharashtra's output reached 88.30 lakh tonnes, while Utter Pradesh produced 69.50 lakh tonne.

Another 9-10 lakh tonne production is expected during May-September and this will take the total output 260 lakh tonnes for the season. Arrivals and dispatches improved as stockists slowly started building inventories before the market rallies. In Vashi market arrivals were 52-53 truckloads and local dispatches were 51-52 loads. On Wednesday about 19-20 mills offered tenders and sold about 73,000-75,000 bags in the range of Rs 2,770-2,880 (Rs 2,760-2,870) for S-grade and Rs 2,880-2,950 (Rs 2,860-2,940) for M-grade. Tender rates were expected to be Rs10 higher later on Thursday evening.

The Bombay Sugar Merchants Association's spot rates were: S-grade Rs 2,912-2,975 (Rs 2,912-2,962) and M-grade Rs 3,041-3,151 (Rs 3,002-3,121).Naka delivery rates: S-grade Rs 2,880-2,930 (Rs 2,860-2,910) and M-grade Rs 2,970-3,060 (Rs 2,960-3,060).