Sugar fell by Rs 10-20 a quintal in the spot market, following weakness at the naka and mill levels. Tender rates at naka and mill levels dropped by Rs 20-40 a quintal due to higher sales in the resale market.
As stockists have already covered at a higher price, volume at the upper mill level remained normal. Weak futures price also weighed on the spot market. Retail demand is expected to drop in mid-August. A wholesaler in the Vashi market here said: “Sales in the resale market have gone up as due dates for lifting sugar — August 15 and 20 — near. Most stockists covered in the first week of the month when sugar had crossed Rs 3,700 at the mill level. Prices have crashed since then, keeping bulk buyers away despite festival demand. Traders are cautious as retail demand may drop. Moreover, the Government has released 4 lakh tonnes more sugar.”
According to the Government, the area under sugarcane this year is 52.88 lakh hectares, against 50.59 lakh hectares last year. An industry association recently projected production for 2012-2013 (starting October) at 250 lakh tonnes. Uttar Pradesh has received sufficient rainfall, while Maharashtra and Tamil Nadu have received scanty rainfall.
In Vashi, 55-56 truckloads (each of 100 bags of a quintal each) and 52-53 truckloads were locally despatched. On Saturday, about 14-15 mills offered tenders and sold about 35,000-40,000 bags to local stockists at Rs 3,470-3,520 (Rs 3,470-3,550) for S-grade and Rs 3,550-3,620 (Rs 3,570-3,650) for M-grade.
Bombay Sugar Merchants Association’s spot rates: S-grade Rs 3,591-3,676 (Rs 3,606-3,686) and M-grade Rs 3,651-3,811 (Rs 3,672-3,831).
Nakadelivery rates: S-grade Rs 3,540 -3,580 (Rs 3,570-3,620) and M-grade Rs 3,600-3,730 (Rs 3,620-3,760).