Sugar rules steady after word on exports quota

Mumbai, Sugar price were steady on Wednesday in spite of a sharp decline in futures on Tuesday. The physical market saw month-end routine demand. At the Vashi market, spot prices for M-grade fine variety up by Rs 5-10 on improved demand while S-grade held steady. Naka and mill tender rates ruled unchanged as traders and farmers are waiting for the sugar quota announcement for the coming month. Volumes were at usual level, keeping sentiment steady, said traders.

A wholesaler said prices firmed up on Tuesday in cash market on the announcement of additional 10 lakh tonnes of exports in current season year. But speculation about Government considering quarterly free sale quota from April in and shelving the monthly quota mechanism led to heavy selling pressure in futures market on Tuesday.

Fall in futures market weighed on the physical market on Wednesday. Physical demand is expected to rise with onset of summer.

On Tuesday the sugar industry demanded again for further exports of 10 lakh tonnes in next 15 days to improve mills' cash liquidity for clearing cane dues, which are threatening to touch Rs 10,000 crore by April.

On expectations of higher shipments from India, world prices has been under pressure for last three days. In world market, sugar prices fell further on Tuesday: May-12 futures dropped by $11.10 to $637.70 ($648.80) while August-12 futures closed lower by $8.50 to $625.00 ($633.50) taking total loss to $25 in three days.

Arrivals to Vashi market was about 50-51 truckloads and local dispatches were about 48-50 loads. On Tuesday evening, 17-18 mills offered tenders and sold about 30,000-32,000 bags in steady range of Rs 2,715-2,780 (Rs 2,715-2,780) for S-grade and Rs 2,790-2,890 (Rs 2,790-2,880) for M-grade.

Bombay Sugar Merchants Association's spot rates: S-grade Rs 2,870-2,925 (Rs 2,872-2,925) and M-grade Rs 2,951-3,046 (Rs 2,941-3,041). Naka delivery rates: S-grade Rs 2,820 -2,870 (Rs 2,820-2,870) and M-grade Rs 2,920-3,000

(Rs 2,920-3,000).