Indian sugar mills association

Wary buyers pound sugar

Date:	16 Dec 2011

Source:	The Business Line

Reporter:	BL Correspondent

News ID:	771

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Mumbai, Dec.15: The plunge in sugar prices continued on Thursday in sympathy with the bearish trend in global market. Buyers, too, kept away since they were not ready to make purchases in a falling market.

“Buyers run away from a falling market but queue up in a rising market. We are seeing that effect now. The pipeline is dry and once the market looks up, we can see demand emerging,” said a trading source from Uttar Pradesh.

In central Uttar Pradesh, sugar produced last season that ended in September was quoted at Rs 2,920 a quintal, while the one produced this season ruled at Rs 2,950-60.

“Some local demand is there and mills are selling some 500-1,000 bags,” the source said.

In Maharashtra`s Vashi spot market prices for S–grade sugar dropped by Rs 20-35, while M-grade fell by Rs 30 a quintal. Prices have declined by about Rs 200 a quintal this month. Naka rates for S-grade fell by Rs 50, while absence of resale selling kept M-grade naka rates steady.

Sugar futures price declined by over Rs 50 till noon forcing mill tender rates to drop by Rs 30-40, said traders.

Mr Harakhchand Vora, Vice-President of Bombay Sugar Merchants Association, told Business Line, “In absence of active inventory buying from local and upcountry stockists, producers have slowly started selling at reduced rates in keeping with market sentiment. On the other side, due to low demand, volumes remain small. Retailers make need-based purchase as and when required considering ample supply.”

He further added that currently there is no reasons for markets to improve. On Wednesday, 18-20 mills offered tenders and sold 80,000–85,000 bags in the range of Rs 2,820-2,900 (Rs 2,850-2,910) for S-grade and Rs 2,920-3,010 (Rs 2,950-3,040) for M-grade. Arrivals in Vashi market eased to 44-45 truckloads and local dispatches were around 38-40 truckloads leading to increase in market inventory. Freight rates ruled steady. The Bombay Sugar Merchants Association`s spot rates: S-grade Rs 2,991-3,045 (Rs 3,001-3,081) and M-grade Rs 3,076- 3,182 (Rs 3,076-3,212).

Naka delivery rates: S-grade Rs 2,940-2,980 (Rs 2,960-3,030) and M-grade Rs 3,040-3,140 (Rs 3,040-3,140).

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