Indian sugar mills association

Sugar continues to head south

Date:	07 Dec 2011

Source:	The Business Line

Reporter:	BL Correspondent

News ID:	749

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Mumbai, Dec. 5: Sugar prices continued to fall across the country on selling pressure on Monday. Prices have dropped by Rs 100 a quintal in the last 10 days.

In Uttar Pradesh, sugar produced last season that ended in September was quoted at Rs 2,980 a quintal, down Rs 70 over Friday. Sugar produced this season ruled at Rs 3,070.

“There is some demand only around these levels,” said a trading source.

At the Vashi wholesale spot market, price declined by Rs 20-25, while naka rates fell by Rs 20–40 a quintal on Monday on fresh selling by producers, tracking weak trend in the futures market and selling pressure in other centres.

Mill tender rates eased by Rs 40 – 50 as millers started offering fresh tenders at reduced rates. Volume was higher due to improvement in local demand at the beginning of the month . Sugar prices may decline further by Rs 60 – 80 in the coming days, said traders.

Market sources said, arrivals and local dispatches were higher at the Vashi market after last week`s disturbance due to protests against the Government`s decision to allow Foreign Direct Investment (FDI) in the retail sector. On Saturday evening, a few mills offered tenders, but quoted high prices resulting in poor response.

A spokesman for the Bombay Sugar Merchants Association told Business Line, “With the start of the new month, mills have started selling sugar at lower rates as the free sale quota is sufficient to meet the domestic monthly demand.

Mills ask for more

The Government has declared a total 17.006 lakh tonnes free sale quota for December compare to 17.01 lakh tonnes last month. Notification for 10 lakh tonnes of sugar for export has also been issued but that factor has been already discounted.”

A leading broker said, sugar mills are demanding that more exports be allowed. If the Centre favours producers or allows more quantity for export, then it will affect the trend, he said. On Saturday, mill sold about 30,000 – 35,000 bags in the range of Rs 2,930-2,990 (Rs 2,950-3,040) for S-grade and Rs 3,000-3,050 (Rs 3,080-3,110) for M-grade. Arrivals in Vashi market were higher at 55-56 truckloads and local dispatches were around 50-52 truckloads.

Bombay Sugar Merchants Association`s spot rates: S-grade - Rs 3,080-3,212 (Rs 3,091-3,240); and M-grade - Rs 3,156- 3,342 (Rs 3,176-3,301).

Naka delivery rates: S-grade - Rs 3,000-3,060 (Rs 3,040 - 3,080); and M-grade - Rs 3,120-3,200 (Rs 3,140-3,200).

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