Indian sugar mills association

Sugar plunges to Rs 2,900 a quintal in U.P.

Date:	20 Dec 2011

Source:	The Business Line

Reporter:	BL Correspondent

News ID:	776

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Mumbai, Dec. 19: Sugar prices plunged to Rs 2,900 a quintal in Uttar Pradesh, while the drop slowed a bit in Maharashtra.

“Sugar prices have dropped by Rs 300 a quintal ever since the Centre announced the free sale quota for this month,” said a trading source.

Sugar produced this season starting October dropped to Rs 2,900 a quintal in central Uttar Pradesh, while the one produced last season was quoted at Rs 2,800.

Market sources said, considering that prices are at parity levels, mills are hesitating to sell at lower prices despite lack of demand. Only mills needing immediate liquidity sold, while others held back their produce.

Due to limited demand in the middle of the month in the Vashi physical market, prices dropped by Rs 10. The naka rates for S-grade fine variety increased by Rs 10, while those of M-grade gained/lost Rs 10 depending on whether the quality is normal/fine . Mill tender rates for S-grade dropped by Rs 15-20 and then stabilised.

Volumes were as usual, but less than market expectation.

Market stocks

Lower local dispatches against arrivals in Mumbai resulted in a slight increase in market inventory. With sufficient stocks, most of the stockists are keeping away from fresh bulk buying. In the current month, there is hardly any buying by neighbouring States as prices are under pressure in other producing centres this month.

On the other side, there is movement on the export front as international sugar prices are also ruling weak and range-bound this month, and there are less chances that the prices will improve.

Currently, the Vashi market is carrying daily inventory of nearly 80- 100 truckloads (each of 100 bags) and stockists are not interested in increasing it further till this month-end. The market may stabilise in the last week as demand during Christmas may improve.

At the Vashi market on Saturday, 18-20 mills offered tenders and sold 60,000- 65,000 bags to local traders at Rs 2,800-2,850 (Rs 2,800-2870) for S-grade and Rs 2,880-2,970 (Rs 2,880-2,970) for M-grade.

Arrivals in the Vashi market were 48-50 truckloads and local dispatches were around 44-45 truckloads.

Bombay Sugar Merchants Association`s spot rates: S-grade, Rs 2,931-3,000 (Rs 2,936-3,011); and M-grade, Rs 3,000-3,112 (Rs 3,001-3,122).

Naka delivery rates: S-grade, Rs 2,900-2,940 (Rs 2,900 - 2,930); and M grade Rs 2,980-3,060 (Rs 2,970-3,070).

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