Spot sugar prices dip on weak sentiment

MUMBAI, APRIL 25:

Spot sugar prices on Monday at the Vashi market declined again by Rs 10 after witnessing weak trend during last week.

Selling pressure by mills, for exhausting the current month's free sale quota before due date, weighed on the sentiment.

Local buying was on expected lines but heavy selling by mills led to the decline in prices. Naka and Mill tender rates also eased by Rs 10-15 a quintal. Morale was weak said, market traders.

Mr Mukesh Kuwadia, Secretary of Bombay Sugar Merchants Association, toldBusiness line, “Compared to producers' supply, summer demand proved weak, which led to bearish market condition. Mills have to exhaust the sale of the current month's free sale quota. Local demand usually eases during school/collage vacation period and that is also one of the reasons for the bearish mood”.

He further said production for the current season is expected to be more than 250 lakh tonnes, which is higher than domestic demand and exports are the only option. But the export market is also on a downward trend, making sugar exports unattractive.

Monthly sale quota continues to be driving force for mills.

In world market, talk of Brazil postponing proposed levy on sugar exports will lead to more flow into the world market and further decline in price.

Mr Jagdish Rawal of B. Bhogilal and Co. said, the Government has declared 17 lakh tonnes of free sale quota for April, out of that, mills still have to sell a substantial amount of stocks.

Limited buying by local and upcountry stockists/trader kept market sentiment in over supply position. Fresh inventory buying is still not picking up due to vacation period.

Arrivals were higher than dispatches on Monday. Selling pressure may increase in this week at mill level as current month's free sale quota's validity comes to an end this week-end.

According to traders on Saturday evening, nearly 18-20 mills offered tenders and sold about 30,000-32,000 bags (100 kg each) to local stockiest in the range of Rs 2,610-2,650 for S grade and Rs 2,660-2,740 for M grade.

Due to poor response from the buyers most of the tenders were open.

In the Vashi market arrivals were around 54-55 truck loads (100 bags each) and local dispatches were 48-50 truck loads.

Bombay Sugar Merchants Association sugar rates:

Spot rates: S grade Rs 2,731-2,810 (Rs 2,741-2,810) and M grade Rs 2,771-2,881 (Rs 2,781-2,891).

Naka delivery rates: S grade Rs 2,710-2,740 (Rs 2,720-2,750) and M grade was Rs 2,740-2,850 (Rs 2,760-2,810).

(Source: http://www.thehindubusinessline.com/markets/commodities/article1766422.ece)