Sugar prices at Vashi market dropped by Rs 40 – Rs 60 a quintal in spot on Wednesday due to higher selling pressure.
Local demand remained routine while to finish the free sale quota in time mills continued selling at reduce rates.
Weak sentiments at producer level weighed on naka trade with decline of Rs 20 – Rs 60. Mill sold sugar Rs 40 –
Rs 50 lower as overall sentiments in physical and futures markets was bearish said traders.
Sources said local retail demand was need based and routine while heavy selling pressure mounted at producing
level as millers have to sell off allotted free sale quota in time before month end. Government has released additional
quota of 6.66 lakh tonnes in two tranche over and above free sale quota of 45 lakh tonnes initially declared for
July – September quarters for which producers are directed to sale 70 % of the quota means 31.50 lakh tones
till August end. As per traders total about 20 lakh tonnes of sugar flow is expected in August. As half of the month
is passed away it seems that mills are under pressure to sale the quota.
In Vashi market new business remained routine while arrivals were slightly higher. Freight rates were steady after
decline by Rs 5 per bags last week. Sugar prices crossed Rs 3900 marks in Vashi market on 4th August with the
jump of Rs 250 in week then additional release of free sale quota has erased the same in a week due to improve
selling by mills.
Analyst said, in International markets sugar futures prices slid to a fresh two and a half month low on Tuesday on investor and producer selling, as the market remained under pressure from harvesting in top producer Brazil. Favourable weather in Brazil had enabled harvesting to pick up and that producer selling weighed on prices. Brazil cane crush data is expected from industry group Unica later this week. On Tuesday October -12 futures dropped by $ 18.30 to $547.90 ($566.20) lowest since 8th June. December -12 futures declined by $13.90 to $548.20 ($562.10) per ton.
In Vashi market arrivals were 55 - 56 truck loads (Each of 100 bags of quintal each) and local dispatches were about
51-52 truck loads. On Tuesday about 19 – 20 mills offered tenders and sold about 48,000 – 50,000 bags (Each of 100 kgs)
to local stockiest in the range of Rs. 3,350-3,400 (Rs 3,380-3,430) for S-grade and Rs 3,460-3,500 (Rs 3,460-3,550) for M-grade.
Bombay Sugar Merchants Association's spot rates: S-grade Rs 3,501-3,575 (Rs 3,540-3,612) and M-grade Rs 3,562- 3,701
(Rs 3,622- 3,731). Naka delivery rates: S-grade Rs 3,450 -3,470 (Rs 3,470-3,500) and M-grade Rs 3,500-3,620 (Rs 3,560-3,650).