Indian sugar mills association

Sugar turns bitter on selling pressure

Date:	06 Jan 2012

Source:	The Business Line

Reporter:	BL Correspondent

News ID:	825

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Mumbai, Jan. 5: Sugar prices continued their downward trend for the fifth consecutive day on Thursday this month on increased selling pressure at producers level.

Spot prices on the Vashi terminal market eased further by Rs 5-7 a quintal while naka rates lost Rs 10–20 for S-grade and Rs 10-30 for M-grade on increased resale. With carryover from last month, mills are under pressure to sell the one lakh tonnes of free-sale quota before the January 15 deadline. Tender rates declined by Rs 20 a quintal. Volumes were higher in the physical market but ample supplies kept volumes bearish, said traders.

Mr Jagdish Rawal, a wholesaler, said that despite lower sale quota, the market continued to witness a bearish trend on less-than-expected demand and ample supplies from mills. Prices in other producing centres, including Uttar Pradesh, ruled weak due to limited demand. Hence, there is no active buying from neighbouring States in Maharashtra since last month. Currently, it seems that producers are under pressure to sell before due dates. Increased selling by mills put more pressure on naka rates while its effect in the physical market is small due to local demand which is high because it is the beginning of the month, he said.

Local freight charges were unchanged. Arrivals were 55-56 truckloads and local dispatches were around 50-51 truckloads. On Wednesday, about 12–14 mills offered tender and sold about 40,000–45,000 bags in the range of Rs 2,770-2,830 (Rs 2,770-2,850) for S-grade and Rs 2,850-2,930 (Rs 2,870-2,950) for M-grade. In the world market, March-12 futures was up by $2.50 to $632.20 ($629.70) and May-12 futures increased by $2.40 to $618.00 ($615.60) on Wednesday.

Bombay Sugar Merchants Association`s spot rates: S-grade Rs 2,906-3,000 (Rs 2,910-3,005) and M-grade Rs 2,996- 3,096 (Rs 2,996-3,102).

Nakadelivery rates: S-grade Rs 2,860-2,900 (Rs 2,870-2,920) and M-grade Rs 2,960-3,020 (Rs 2,970-3,050).

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