Indian sugar mills association

Sugar mills under pressure to exhaust sale quota

Date:	24 Feb 2012

Source:	The Business Line

Reporter:	BL Correspondent

News ID:	939

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Mumbai, Feb. 23: Sugar prices declined by Rs 10-15 a quintal in Naka rates. Spot prices ruled steady on routine local demand on Thursday. Mill tender rates dropped by Rs 5-10 and were expected to drop lower further, as mills will be under pressure to exhaust this month`s sale quota. A leading trader said that in the absence of buying by neighbouring States , only State-level markets were the main buyers.

Sugar prices in Uttar Pradesh and in the southern States are ruling at a par with Maharashtra, keeping away buyers from eastern and southern States. Since January, no volume has been witnessed through rail rakes, mounting pressure on producers. Local demand is also very need-based presently due to month-end. With the expectation of higher production this year, the Government may declare higher free sale quota for March compared with this month. Despite lower free sale quota, the market has not witnessed any improvement or big upside this month, but with the increase in temperature, demand for sugar is expected to rise significantly soon, which may improve the sentiment over all.

Opportunity for sugar exports is improving with the constant rise in world sugar prices. Arrivals in Vashi market were 50-52 truckloads and local dispatches were around 48-50 truckloads.

On Wednesday evening, about 22-23 mills offered tenders and sold about 58,000-60,000 bags in the range of Rs 2,730-2,800 (Rs 2,730-2800) for S-grade and Rs 2,840-2,880 (Rs 2,840-2,900) for M-grade.

The Bombay Sugar Merchants Association`s spot rates: S-grade Rs 2,876-2,932 (Rs 2,876-2,932) and M-grade Rs 2,982- 3,042 (Rs 2,986- 3,042).

Naka delivery rates: S-grade Rs 2,830 - 2,870 (Rs 2,840 - 2,880) and M - grade Rs 2,920-3,000 (Rs 2,940-3,020).

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