Sugar prices on the Vashi wholesale market ruled almost steady for the third consecutive day on Thursday. Spot prices for the fine variety increased by Rs 5 a quintal, while that of the normal quality decreased by Rs 5. Naka and mill tender rates were unchanged because of lower-than-expected local demand and need-based month- end offtake. Few mills offered tenders, indicating they are not under pressure. Mr Jagdish Rawal, a wholesaler, said that everyone is now waiting for announcement of the September quota. Currently, the demand is subdued and millers are selling based on the market trend. With Ramadan starting in July and other festivals to follow, demand is sure to improve during the second quarter.
Producers, he said, are not willing to sell at lower rates on expectation of higher demand. The world market is also seen moving up this week due to fresh demand from China and tight shipments from Brazil. The weakening rupee will provide an opportunity for sugar exporters. According to the the sugar industry, till June 21.72 lakh tonnes of sugar were exported. The future price trend market will depend upon the announcement of a new free-sale quota for July-September.
Delayed monsoon across the country is raising fears about crop output. Sugar production in the 2012-13 season is estimated at 260-265 lakh tonnes, but this will depend on the progress of the monsoon and yield, said sources.
In the international markets, sugar futures closed higher for the third consecutive day on concerns about supplies in Brazil and talk of Chinese buying.
In the Vashi market, 49-50 truckloads arrived and local dispatches accounted for 47-48 truckloads.
A total of some 90-100 truckloads are lying in the market as inventory, traders said.
On Wednesday, only 4-5 tenders were offered and 8,000-10,000 bags were sold at Rs 2,880-2,930 (Rs 2,880-2,930) for S-grade, and Rs 2,960-3,030 (Rs 2,960-3,030) for M-grade.
Bombay Sugar Merchants Association's spot rates: S-grade, Rs 2,986-3,022 (Rs 2,982 -3,026); and M-grade, Rs 3,041- 3,181 (Rs 3,041- 3,181).
Naka delivery rates: S-grade, Rs 2,945 -3,000 (Rs 2,945 -3,000); and M-grade, Rs 3,040-3,110 (Rs 3,040-3,110).