Sugar prices bounced back from lower level on Tuesday. Initiallyspot prices declined by Rs 5-10 but sentiment immediately improved on report of fresh buying by eastern States. Naka rates ruled mixed while mill tender rates dropped by Rs 15 a quintal.

Harakhchand Vora, Vice-President of Bombay Sugar Merchants’ Association, told Business Line that “on bounce back of futures markets, expectation of higher demand next month for the Ganeshotsav festival and eased selling pressure at mill level supported the sentiment in physical market.”

Stockists are currently keeping lower inventories due to monsoon and month-end. Retail demand is also routine but from next week demand is likely to rise due to Ganeshotsav festival”.

A Vashi-based market observer said fresh buying especially from Eastern side in Maharashtra and short covering following recovery in futures market has supported the sentiment in physical market.

Maharashtra’s mills sold about 2-3 rakes (each of 27,000 bags) on Monday evening to mostly eastern side buyers over and above routine daily sales to local traders. In Vashi market, arrivals were higher at 54-55 truckloads (each of 100 bags of quintal each) and local dispatches were 51-52 loads.

On Monday about 15-16 mills sold more than 1.25 lakh bags including three rail rakes (81,000 bags) to eastern buyers and about 48,000-50,000 bags (each of 100 kg) to local traders in the range of Rs 3,325-3,400 (Rs 3,340-3,400) for S-grade and Rs 3,425-3,500 (Rs 3,440-3,500) for M-grade.

The Bombay Sugar Merchants Association's spot rates were (Rs/quintal): S-grade Rs 3,452-3,512 (Rs 3,462-3,525) and M-grade Rs 3,526- 3,661 (Rs 3,531- 3,671). Naka delivery rates: S-grade Rs 3,410 -3,460 (Rs 3,410-3,450) and M-grade Rs 3,500-3,620 (Rs 3,510-3,620).