Indian sugar mills association

Mills curb despatches to cap s

Date:	02 Nov 2011

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News ID:	638

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Mumbai, Nov 1: Sugar prices at the producer`s gate in Maharashtra declined sharply due to lack of demand.

Naka rates tracked the same route, while lower arrivals and local despatches limited the decline in spot rates. On Tuesday, mill tender rates declined by Rs 20-40 a quintal. Naka rates, under selling pressure, lost Rs 15-20, while usual lower demand after Diwali cooled spot rates further by Rs 5-10 in the Vashi wholesale market.

Expectation of new consumption demand in the physical market at the beginning of the month is supporting sentiment by arresting the speed of price decline, market sources said. The sugar sector is now eagerly waiting for the Centre`s announcement on fresh exports, as the new crushing season is now picking up and higher production is expected in the current year.

Mr Mukesh Kuwadia of Bombay Sugar Merchants Association told Business Line: “The current double-digit food inflation rates will not allow the Government to take any hasty decision on a sensitive issue which may fuel inflation. On the other hand, India will have a higher sugar production for the second consecutive year, which will lead to surplus if exports are not allowed.”

The Government should allow exports once a month to once in two months under a quantitative ceiling, he said. In August, the Government allowed export of five lakh tonnes of sugar. It takes two months to fill up that quota, he said. A wholesaler said that ample free-sale quota for November will not allow the market to go up due to usual lower demand after the Diwali festival. In the first fortnight of the month, sugar prices may witness a bearish sentiment. Pressure on traders for lifting October`s purchases will keep them away from fresh buying this week. In the second fortnight, selling pressure on mills may be seen due to the availability of free sale quota of 17.01 lakh tonnes for the month.

Arrivals at the Vashi market were at 45-46 truckloads, while local despatches were at 40-42 truckloads. On Monday, 8-10 mills offered tenders and sold about 20,000-25,000 bags to local traders at Rs 2,680-2,760 (Rs 2,720-2,790) for S-grade and at Rs 2,800-2,900 (Rs 2,820 -2,930) for M-grade sugar.

Bombay Sugar Merchants Association`s spot rates: S-grade — Rs 2,821-2,905 (Rs 2,821-2,911) and M-grade — Rs 2,906-3,061 (Rs 2,911-3,062).

Naka delivery: S-grade — Rs 2,760- 2,830 (Rs 2,780-2,850) and M-grade Rs 2,870-3,010 (Rs 2,880-3,000).

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