Sugar prices bounced back on Thursday, as stockists began purchases to fulfil the new-month retail demand. Besides, the Union Government has extended the deadline to December 10 for sales of the unsold 2 lakh tonnes from the October-November quota. This has helped mills to delay sales, as they expect higher demand from next week, said traders.
Prices on the Vashi wholesale spot market improved by Rs 20 a quintal tracking Rs 40-50 jump in naka trades due to lack of sales in the resale market. Mill tender rates inched up by Rs 30-40 on higher demand. Futures were also firm. Stockists were refraining from buying in the last few days, as demand was low and supplies from mills were high. Local freight rates may improve due to shortage of trucks for lifting sugar from producers.
After Diwali, spot prices had dropped by Rs 55-60 a quintal on poorer demand. Prices in Maharashtra are on a par with other main producing centres in Uttar Pradesh and Karnataka.
A commodity analyst said the 70 lakh-tonne non-levy quota for December-March is more than sufficient. As there is still no scope for exports, the market will depend local demand and progress in crushing. The farmers’ agitation for higher cane price has already delayed the crushing season by a fortnight.
The Union Government revised the output lower to 230 lakh tonnes in the current marketing year, just sufficient to meet the demand.
At the beginning of the 2012-13 marketing year (October-September), the Food Ministry had pegged output at 240 lakh tonnes against 260.6 lakh tonnes last year.
On the National Commodities and Derivatives Exchange, January contracts were up to Rs 3,318 (Rs 3,301), February to Rs 3,339 (Rs 3,316) and March to Rs 3,353 (Rs 3,335) till noon.
In Vashi, arrivals were higher at 67-68 truckloads (each of 100 bags) and local despatches were 64-65 truckloads.
On Thursday evening, 10-12 mills offered tenders and sold nearly 75,000-80,000 (each of a quintal) bags to local traders at Rs 3,310-3,360 (Rs 3,290-3,350) for S-grade and Rs 3,360-3,430 (Rs 3,340-3,420) for M-grade.
The Bombay Sugar Merchants Association’s spot rates were: S-grade Rs 3,432-3,492 (Rs 3,412-3,492) and M-grade Rs 3,496-3,701 (Rs 3,476-3,701).
Naka delivery rates: S-grade Rs 3,400-3,450 (Rs 3,350-3,400) and M-grade Rs 3,450-3,550 (Rs 3,420-3,500).