Sugar prices extended gain further by Rs10-12 in Vashi wholesale market on Tuesday. Naka rates ruled firm tracking unwillingness of millers to sell at lower rates ahead of very crucial meeting to be held at Delhi late evening of the day. Volume in physical market was at routine on continued retail demand in the beginning of the month.
Market sources said naka rates improve by Rs10-15 while mill tender rates remain unchanged with firm under tone as some mills sold last year's production at lower ratesTraders were cautious before outcome of Tuesday's meeting that will set the trend for future.
Election process and rally of candidates in producing areas of Maharashtra may limit the arrivals in consuming market for some days. For the second day, small number of mills offered tenders to improve the market sentiment further, sources added.
Routine volume
A wholesaler said, though volume was at routine level due to month beginning retail demand, market players are now waiting for the outcome of meeting to be held at Delhi. Any decision on additional sugar exports or decontrol of sugar sector will fuel the market sentiment.
Maharashtra's mills continued selling in local markets because of lack of demand from neighbouring States for the past one month. Additional export permission may help them positively being a leading sugar producing State of India.
Analyst said mills are holding ample stocks as production is higher than last year. Secondly, since world sugar prices are showing firm trend, if more exports are allowed, it will be beneficial for the producers.
Government has permitted exports of 10 lakh tonnes under open general licence out of which release orders for export of 8.54 lakh tonnes have been issued so in the current season. The deadline for seeking permits for export for merchant exporters is February 15.
In world market, sugar futures prices continued its bull run on third consecutive day with rise of more than $7 a tonne. On Monday, March-12 futures closed higher by $7.40 to $642.50 ($635.10) and May-12 futures increased by $7.70 to $627.60 ($619.90).
Arrivals in Vashi market were 50-52 truckloads and local dispatches were around 48-50 truckloads. On Monday, nearly 15-17 mills offered tenders and sold about 85,000–90,000 bags in the range of Rs 2,810-2,850 (Rs 2,810-2850) for S-grade and Rs 2,900-2,950 (Rs 2,900-2,950) for M-grade.
Bombay Sugar Merchants Association's spot rates: S-grade Rs 2,912-2,961 (Rs 2,926-2,962) and M-grade Rs 2,991- 3,091 (Rs 2,980- 3,092). Naka delivery rates: S-grade Rs 2,860 - 2,940 (Rs 2,880 - 2,940) and M-grade Rs 2,970-3,060 (Rs 2,940-3,050).