Mumbai, Sept 26:

Sugar prices dropped to year’s low on increased selling pressure on Thursday.

On the Vashi wholesale market, spot prices for S-grade dropped below Rs 3,000 a quintal. On the domestic futures market, prices dropped below Rs 2,900 for contracts maturing in October.

Producers sold sugar Rs10-30 lower to ease inventory burden as the new crushing season is set to start soon.

Naka rates were under as traders had to lift stocks for deals that end this month. In Vashi, spot market prices declined by Rs 5-15 a quintal, said sources.

An analyst said that in the absence of export possibilities currently, sugar mills continue to sell in local markets, which are already carrying ample stocks.

Hence, producers were forced to sell at lower rates as they needed liquidity.

The crushing season year will start from October 1 and sugar output is expected higher than local demand. Traders are expecting closing stocks of around 85-90 lack tonnes this season ending this month.

Prices on the domestic futures continued to drop for the fifth consecutive day in the absence of any positive cue.

Arrivals in the Vashi market were 62-64 truckloads (each 100 bags), while local dispatches were 58-60 loads.

On Wednesday evening, 14-15 mills offered tenders and sold 39,000-40,000 bags (each 100 kg) at Rs 2,820-2,900 (Rs 2,840-2,930) for S-grade and Rs 2,950-3,010 (Rs 2,950-3,020) for M-grade.

On the National Commodities and Derivatives Exchange, sugar October futures declined by Rs 15 to Rs 2,899 (Rs 2,914), November lower by Rs 10 to Rs 2,929 (Rs 2,939) and December dipped by Rs 7 to Rs 2,944 (Rs 2,951) till noon.

The Bombay Sugar Merchants Association's spot rates were: S-grade Rs 2,986-3,121 (Rs 3,002-3,125) and M-grade Rs 3,136-3,282 (Rs 3,141-3,282).

Naka delivery rates were: S-grade Rs 2,930-3,000 (Rs 2,930-3,000) and M-grade Rs 3,040-3,170 (Rs 3,040-3,170).

Uttar Pradesh rates were: Lakhimpur Rs 3,300 and Muzzafarnagar Rs 3,260.