Sugar prices continued its downward journey on Friday following an almost panic selling from resellers and producers under pressure to complete the current months free sale quota. In Vashi market spot rate extended lose further by Rs 50 for S-grade and Rs 80 for M-grade while naka prices decline by Rs 50 – Rs 70 a quintal on back of Rs50 – Rs 60 lower selling by mills. Local demand remains stable in middle month but higher supply keep sentiment weak said wholesaler.
Spokesman of B. Bhogilal and co., said weak futures markets, need based routine local demand and higher selling by mills in absence of any bullish factor market continued its downward journey. When prices shot up new high in first week most stockiest and retailers have covered significantly expecting further upward journey but meantime government intervene with release of additional free sale quota to be sold in August this has proved positive for the consumers and prices started falling since then. The rise of Rs 200 in first week has been washed out by decline of more than Rs.300 in next seven days.
Analyst said millers have to sell about 38 lakh tonnes of sugar in two months time gap hence the selling pressure on producers continued as they have to finish the quota before August end. Government has directed producers to sell 70 % of the 45 lakh tonnes released for the quarter July – September means more than 31.50 lakh tonnes in first two month. To curb the price rise Government has released additional quota of 2.66 lakh tonnes on 27th July and another 4 lakh tonnes on has been released on 7th August, 2012 to be sold off by 31stAugust, 2012. In first week of the month sugar prices crossed the level of Rs.3900 level in Vashi market but with additional release of quota prices dropped by more than Rs 300 per quintal till now.
In International markets sugar futures prices dropped to the lowest level for the spot contract since June 14. The market closed lower for the 13th straight session. Improved crop weather in Brazil and India, and reselling by China’s traders, continued to pressure the market as these
Factor’s indicates there will be abundant global supplies. On Thursday October -12 futures declined by $ 5.80 to $559.50 ($565.30) and December -12 futures drop by $2.60 to $554.60 ($557.20) per ton taking total loss of $45 this month.
In Vashi market arrivals were 56 - 57 truck loads (Each of 100 bags of quintal each) and local dispatches were about 52-53 truck loads. On Thursday evening about 18 – 20 mills offered tenders and sold about 83,000 – 85,000 bags (Each of 100 kgs) to local stockiest in the range of Rs. 3,340-3,400 (Rs 3,380-3,450) for S-grade and Rs 3,480-3,520 (Rs 3,480-3,580) for M-grade.
Bombay Sugar Merchants Association's spot rates: S-grade Rs 3,482-3,612 (Rs 3,522-3,612) and M-grade Rs 3,562- 3,676 (Rs 3,612- 3,752). Naka delivery rates: S-grade Rs 3,425 -3,460 (Rs 3,480-3,530) and M-grade Rs 3,500-3,560 (Rs 3,550-3,630).