Mumbai, Sept. 30:

Sugar prices ruled steady on the Vashi wholesale market on Monday after declining continuously last week. Prices dropped by Rs 30-40 in the spot market and Rs 65-70 in the futures market last week.

Domestic futures prices have dropped by more than Rs 140 a quintal this month.

Expectations of higher demand in October kept the sentiment positive, said traders. Prices in the Vashi spot market were lower by Rs 10 for S-grade.

Naka and mill tender rates remained unchanged at the lower level.

Sources said the mood was positive ahead of festivals such as Navaratri, Dasara and Diwali during October, November. Traders are optimistic about higher demand.

Prices declined last week due to slack local demand and ample supply.

The Vashi market is continuously carrying 120-125 truckloads of inventory, so bulk buyers are keeping off . With neighbouring States also not buying, exporters and millers are bound to concentrate on the local market.

Meanwhile, the Income Tax department has begun issuing fresh demand notices to cooperative sugar mills in Maharashtra for paying cane

price over and above the fair and remunerative price fixed by the Government.

Arrivals in the Vashi market were 61-62 truckloads (each of 100 bags) while local dispatches were 60-61 loads.

On Saturday, seven or eight mills offered tenders and sold 33,000- 35,000 bags at Rs 2,810-2,880 (Rs 2,800-Rs 2,880) for S-grade and Rs 2,930-Rs 3,010 (Rs 2,930- 3,000) for M-grade.

The Bombay Sugar Merchants Association's spot rates were (Rs/quintal):

S-grade: Rs 2,961-Rs 3,121 (Rs 2,971-Rs 3,121) and M-grade: Rs 3,112-3,272 (Rs 3,092-3,272).

Naka delivery rates were: S-grade: Rs 2,900-2,960 (Rs 2,900-2,960) and M-grade: Rs 3,010-3,100 (Rs 3,010-Rs 3,100).

Rates in Uttar Pradesh were: Lakhimpur Rs 3,300/