Sugar prices in the domestic futures market dropped by over Rs 40 a quintal, while at the Vashi wholesale spot market, prices remained unchanged on Friday on routine demand and higher supply.

Volumes at upper mill level continued to be high as Kolhapur mills sold two rail rake (about 54,000 bags) to upcountry buyers along with routine local sales of about 45,000-50,000 bags.

A Vashi-based wholesaler Jagdish Rawal told Business Line that “sugar prices ruled steady but sentiment at upper mill level remained positive as Maharashtra’s mills sold nearly one lakh bags (about 10,000 tonnes) on Thursday evening including two rail rakes.

He said that “buyers are making covering purchases before any possible hike in excise duty in the Budget.

Mills were not eager to sell at lower rates, except the old stocks. The Vashi market currently has about 120 truckloads of stocks.

On Thursday evening, 14-15 mills offered tenders and sold 95,000-1,00,000 bags (each of 100 kg) to local and neighbouring States buyers in the range of Rs 3,100-3,160 (Rs 3,100-3,160) for S-grade and Rs 3,200-3,270 (Rs 3,200-3,270) for M-grade.Global sugar prices were also under pressure on talk of higher surplus stocks and selling by top producer Brazil.

On the National Commodities and Derivatives Exchange, sugar prices for March declined to Rs 3,100 (Rs 3,140); April dropped to Rs 3,156 (Rs 3,197) and May to Rs 3,211 (Rs 3,255) till noon.

The Bombay Sugar Merchants Association’s spot rates: S-grade Rs 3,222- 3,300 (Rs 3,222-3,300) and M-grade Rs 3,272-3,442 (Rs 3,272-3,442).

Naka delivery rates were: S-grade Rs 3,200-3,230 (Rs 3,200-3,230) and M-grade Rs 3,240-3,370 (Rs 3,240-3,370).