Indian sugar mills association

Sugar turns bitter on limited demand

Date:	22 Feb 2012

Source:	The Business Line

Reporter:	BL Correspondent

News ID:	929

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Mumbai, Feb. 21: Spot sugar prices declined by Rs 10-15 a quintal based on quality on Tuesday due to need-based local demand. Arrivals and despatches improved as market was closed on Sunday and on Monday due toMaha Shivratri.

Naka rates were down by Rs 8-10, while mill tender rates ruled steady but were expected lower on Tuesday evening. Mr Jagdish Rawal, a wholesaler, said that arrivals and despatches in the Vashi wholesale market improved as the market had a long weekend with Monday being a holiday. Limited local demand kept spot price under pressure, while naka level selling pressure was less.

Due to middle month period, consumer demand is not expected to improve till next week. Weak sugar prices in other producing centres and in futures also weigh on physical market.

A local broker said that sugar prices are ruling range-bound this month as mills are not keen to sale at lower rates to avoid the losses. Sugar price has come down by Rs 350 during December-January. Considering the cost of production for mills, prices are not expected to go down sharply. But some mills facing financial crunch may be forced to sell at lower rates in absence of demand.

In line with that, traders were expecting slight decline in mill tender rates on Tuesday evening. Absence of demand from neighbouring States in Maharashtra since long time keeps sentiment weak at upper level.

Arrivals in Vashi market were 55-56 truckloads and local despatches were around 54-55 truckloads. On Saturday and Monday about 18-20 mills offered tenders and sold about 55,000-60,000 bags in the range of Rs 2,740-2,820 (Rs 2,740-2820) for S-grade and Rs 2,850-2,910 (Rs 2,850-2,910) for M-grade.

Bombay Sugar Merchants Association`s spot rates:S-grade Rs 2,882-2,942 (Rs 2,882-2,942) and M-grade Rs 2,992- 3,062 (Rs 3,001- 3,062).

Nakadelivery rates:S-grade Rs 2,840-2,880 (Rs 2,840-2,880) and M-grade Rs 2,940-3,020 (Rs 2,940-3,000).

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