Spot sugar prices rose further on Tuesday on festival demand.
Fair-quality sugar was up Rs 15-20 a quintal, while fine-quality M-grade shot up by Rs 20-40 a quintal. Most of the volumes traded were for fina quality. Buying by other states continued at the mill level.Like last year, the Government may reduce free-sale quota for November as sugar has remained range-bound for two to three months now, said market players. Prices had shot up by Rs 240 a quintal in November 2010 after the quota was reduced to 16.15 lakh tonnes from 19.98 lakh tonnes in October 2010. This month's quota is 19.97 lakh tonnes. Besides, demand will come down after Diwali next month.
Buying by state-level stockists and new covering from eastern buyers has supported the market. The latter have bought 11-12 rakes till now this month. A rake has 27,000 bags of a quintal each. Demand from local state-level stockists has lowered the selling pressure on mills. Sugar prices may rise from next week till month-end as Diwali buying rises.
Arrivals on Tuesday at the Vashi market were 50-52 truckloads while local dispatches were 48-50 truckloads. On Monday evening, 22-23 mills sold 75,000-80,000 bags at Rs 2,650-2,760 (Rs 2,650-2,740) for S-grade and Rs 2,770-2,870 (Rs 2,765-2,850) for M-grade. Bombay Sugar Merchants Association quoted S-grade at Rs 2,786-2,861 (Rs 2,776-2,845) and M-grade at Rs 2,851-3,026 (Rs 2,861-3,001) in the spot market.
Naka delivery rates for S-grade were Rs 2,740-2,780 (Rs 2,740-2,770) and for M-grade Rs 2,850-3,000 (Rs 2,810-2,950).