Lower demand at the upper mill level pulled down M-grade sugar in the Vashi wholesale market here. In the spot market, M-grade fell by Rs 19 a quintal while S-grade ruled unchanged. Quality M-grade variety was up while normal variety down Rs 19 each a quintal at the naka level. domestic futures were range bound, as the free-sale quota for October and November is sufficient.
Volume was routine in the physical market but eased at the mill level due to month-end. Because of erratic monsoon in Maharashtra, Uttar Pradesh is set to emerge as the largest producer in 2012-13, said a Vashi-based wholesaler. The Indian Sugar Mills Association (ISMA) has projected an 8 per cent drop in the country’s output at 240 lakh tonnes for 2012-13 from 260 lakh this year. Arrivals and despatches in the local market were routine. Current month prices gained due to Ganeshotsav festival.
Demand from neighbouring States has dropped after five rail rakes (each of 27,000 bags) were covered between Saturday and Thursday.
Tracking the steady trend in the physical market, domestic futures ruled range bound after hitting the lowest in a month on Thursday as the Government allowed millers to sell 40 lakh tonnes of non-levy sugar in October and November, higher than the average monthly allocation of around 17 lakh tonnes, said a commodity analyst.
Meanwhile, mills in Uttar Pradesh expect to start cane crushing for the 2012-13 season by the middle of November. Crushing in UP will start around Diwali, said Abinash Verma, Director-General, ISMA. Maharashtra, though, wants mills to begin crushing from November 1.
Sugar futures gained the most in two weeks on speculation that adverse weather in Brazil, the world’s top exporter, and India may limit global supplies.
The October contract on the National Commodities and Derivatives Exchange was at Rs 3,530 (Rs 3,524), November at Rs 3,471 (Rs 3,463) and December at Rs 3,390 (Rs 3,386) at noon.
In Vashi, 68-70 truckloads (each of 100 bags of a quintal each) arrived and 67-68 truckloads were despatched locally. On Thursday evening, 7-8 mills offered tenders and sold about 20,000-22,000 bags to local traders at Rs 3,520-3,570 (Rs 3,520-3,570) for S-grade and at Rs 3,600-3,670 (Rs 3,600-3,670) for M-grade.
Bombay Sugar Merchants Association’s spot rates: S-grade Rs 3,600-3,696 (Rs 3,602-3,696) and M-grade Rs 3,682-3,772 (Rs 3,701-3,791).
Naka delivery rates: S-grade Rs 3,575-3,640 (Rs 3,575-3,640) and M-grade Rs 3,640-3,750 (Rs 3,650-3,740).