Diwali demand keeps sugar up

Sugar prices rose further by Rs 15-20 at the production level leading to retail prices going up by Rs 10-15 a quintal on Friday. The sugar market was bullish this week with prices rising by Rs 40-50 so far, on increased demand ahead of Diwali. Sugar futures prices are also witnessing a firm trend as the Government is considering allowing more sugar exports after Diwali.

Morale firm

Market sources said, firm sugar futures price and improvement in physical demand ahead of Diwali have lead to a positive sentiment.

In the spot market on Friday, S-grade sugar rose by Rs 18, while M-grade ruled steady.

At

naka trades, the price increased by Rs 10 on higher demand. Eastern region buyers continued their buying in Maharashtra. On Wednesday, two rail rakes were taken by them. Good quality sugar was in big demand. Freight rates in the Kolhapur, Karad and Sangli line increased by Rs 5-8 a bag on tight availability of trucks. This improved the sentiment further.

Mr Mukesh Kuwadia, Secretary, Bombay Sugar Merchants Association, told Business Line that this month, due to Diwali, the demand has improved sharply. Bulk consumers are active buyers for fine variety. Sweet and confectionery makers will continue buying till the month end. There is no pressure at the mill level as they are selling despite the price rise.

According to an analyst, the world market scenario is positive and that will work in favour of India, especially as the production in Thailand and Brazil are expected to be lower. Higher imports by China and announcement by Pakistan that it will import four lakh tonnes of sugar this week are likely to prop up sugar prices.

In the international market, thanks to bullish demand-supply reports, December-11 sugar futures closed $14.60 higher at $684.10 from $669.50 a tonne on Thursday. Expectation of the Government giving permission to export more sugar next month has strengthened the sentiment.

Arrivals in the Vashi market were around 52 truckloads, while local dispatches were 48-50 truckloads. On Thursday, some 8-10 mills offered tenders and sold about one lakh bags to local and eastern region traders.

Mills have sold sugar at Rs 2,680-2,775 (Rs 2,665-2,775) for S-grade, and Rs 2,780-.2,900 (Rs 2,780-2,880) for M-Grade. Fine quality sold Rs 10-15 higher.

Bombay Sugar Merchants Association rates : Spot rates: S-grade, Rs 2,800-2,891 (Rs 2,782-2,890); and M-grade, Rs 2,871-3,041 (Rs 2,871-3,041).

Naka delivery rates : S-grade, Rs 2,750-2,800 (Rs 2,770-.2,800) and M-grade, Rs 2,870-3,010 (Rs 2,860-3,000).