Sugar trading came to a virtual halt in Uttar Pradesh on Wednesday as traders awaited the announcement of December open free-sale quota.
However, prices on the Vashi wholesale market declined by Rs 10-15 a quintal for S-grade, while M-grade was unchanged on hope that a free-sale quota of 17 lakh tones will be announced. Naka rates dropped sharply by Rs 20-30 while tender rates weakened on absence of new tenders by mills.
“No one was willing to trade without getting to know the actual free-sale quota,” said a trading source from Uttar Pradesh. Sugar produced last season that ended in September was quoted at Rs 3,050 a quintal, while the one produced this season quoted Rs 100 more.
As usual during month-ends, few mills offered tenders and sold small quantities. Demand may continue for some days as winter hasn't fully arrived in western and central India and mils don't want to sell at lower prices now as higher cane prices have raised input costs, said Mr Harakhchand Vohra, Vice-President, Bombay Sugar Merchants Association.
Demand may go up in the second fortnight of December for Christmas, though the rise will be capped as temperatures fall, a wholesaler said. Market sentiment right now is upbeat on hopes of higher demand during the start of the next month. Demand form neighbouring States has also supported the market in Maharashtra.
On Tuesday evening, 7-8 mills offered tenders and sold about 25,000-30,000 bags to local traders. S-grade fetched Rs 2,950-3,050 (Rs 2,975-3,050) and M-grade Rs 3,080-3,110 (Rs 3,110-3,140). Arrivals in the Vashi market increased to 58-60 truckloads and local dispatches were at 54-55 truckloads. The market will be closed on Thursday. Bombay Sugar Merchants Association's spot prices: S-grade — Rs 3,126-3,251 (Rs 3,146-3,236); and M-grade — Rs 3,240-3,392 (Rs 3,242-3,392).
Nakadelivery rates: S-grade — Rs 3,070-3,140 (Rs 3,100-3,160); and M grade — Rs 3,170-3,250 (Rs 3,200-3,280).