Sugar prices shot up by Rs 20-25 a quintal at all level on Tuesday as producers sold at higher price on demand and possibilities of increase in excise duty on sugar in the Budget.

The Government’s willingness to decontrol the sugar sector has improved the overall sentiment in the market. After a long time Maharashtra’s mills sold sugar in rail rakes to eastern buyers. This is seen as a sign of demand recovery, said an observer.

Harakhchand Vora of Kavita trading co said: “The Vashi terminal market was closed for Shivaji Jayanti, hence, there were no arrivals and dispatches.

Mills are getting good buying support even at higher price. After a long time, Maharashtra mills sold about two rail rakes (approximately 54,000 bags) to buyers from West Bengal.

Producers also sold more than 1.25 lakh bags to State-level stockists at Rs 20-25 higher, he said.

Profit booking by long position holders pulled down the futures market by Rs 18. With rise in temperature, demand for sugar will increase, he said. On Monday evening, about 11-12 mills sold 1.25 lakh-1.50 lakh bags (each of 100 kg) to the local buyers in the range of Rs 3,100-3,130 (Rs 3,070-3,100) for S-grade and Rs 3,200-3,270 (Rs 3,150-3,260) for M-grade.

More than that millers sold two rail rakes to the eastern side buyers.

On the National Commodities and Derivatives Exchange, prices for March were down by Rs 19 to Rs 3,152 (Rs 3,171); April dropped by Rs 10 to Rs 3,208 (Rs 3,218) and May was Rs 3,255 (Rs 3,263).

Nominal rates at the Vashi wholesale sugar market were (Rs/quintal): S-grade Rs 3,210-3,290 (Rs 3,196-3,272) and M-grade Rs 3,280-3,460 (Rs 3,262- 3,431). Naka delivery rates were:S-grade Rs 3,200-3,230 (Rs 3,170 -3,200) and M-grade Rs 3,260-3,370 (Rs 3,240-3,360).