Sugar prices dropped further by Rs 20-30 a quintal at the Vashi spot market on Thursday on rising supply and poor local demand.

The Union Government’s warning to mills to sell non-levy quota of October-November in time or face consequences has dragged down the physical and futures markets.

The free-sale quota for October-November is 40 lakh tonnes. Naka rates fell by Rs 30-40 for S-grade and by Rs 10-15 for M-grade. Mill tender rates slipped further by Rs 20-30 on need-based demand.

Because of lower demand, fewer mills offered tenders on Wednesday evening, a wholesaler in Vashi said. The Navaratri demand is now almost over and Diwali buying is expected to rise from the first week of November.

Demand from neighbouring States is still low in Maharashtra, forcing producers to sell in local markets. Stockists are not buying the market already has more than 10,000 bags in store currently.

On the National Commodities and Derivatives Exchange, November contracts were at Rs 3,324 (Rs 3,342), December Rs 3,295 (Rs 3,315) and January at Rs 3,331 (Rs 3,344) at noon. In Vashi, 68-70 truckloads (each of 100 bags of a quintal each) arrived and 64-65 truckloads were despatched locally.

On Wednesday evening, 10-12 mills offered tenders and sold merely 24,000-25,000 bags to local traders at Rs 3,380-3,430 (Rs 3,400-3,450) for S-grade and at Rs 3,440 - 3,530 (Rs 3,470-3,560) for M-grade.

Bombay Sugar Merchants Association’s spot rates: S-grade Rs 3,512-3,571 (Rs 3,526-3,582) and M-grade Rs 3,582-3,702 (Rs 3,611-3,701).

Naka delivery rates: S-grade Rs 3,460-3,510 (Rs 3,500-3,540) and M-grade Rs 3,540-3,660 (Rs 3,550-3,660).