Financial Daily from THE HINDU group of publications
Wednesday, Aug 04, 2004
Agri-Biz & Commodities
Sugar prices spurt on lower sale quota
Mumbai , Aug. 3
SUGAR prices on Tuesday touched the year's high of Rs 1,661 per quintal for medium grade on lower free sale quota of 10 lakh tonnes announced by the Centre for August, against market expectation of 12 lakh tonnes.
As a result, sugar prices in Mumbai have risen sharply by Rs 70-75 per quintal in a week's time on restricted supply. But retail demand has been steady, a local trader said.
Sugar prices for small grade (S-30) were higher by Rs 70 at Rs 1,548/1,620 per quintal from Rs 1,497/1,549 per 100 kg as on July 24, while medium grade was higher by Rs 75 at Rs 1,580/1,661 per 100 kg from 1,525/1,585 per quintal quoted on July 24.
"Due to heavy rains in the State, sugar inflows from mills have reduced considerably in the last three days. Over and above, there is a shortage of trucks. Thus, truckers have increased freight rates by Rs 20 per quintal recently, which will definitely impact local prices," a leading trader said.
The Government has released 10 lakh tonnes for the current month against 13 lakh tonnes for July.
Of this, the total allocation to Maharashtra has been reduced to about 3.3 lakh tonnes against the previous month's allocation of nearly 4.4 lakh tonnes, down by about 25 per cent, sources said.
"Prices may react at the current level as demand from bulk consumers like soft drink and ice cream makers is almost over, but retail demand will continue," a trader said.
The Government released 38 lakh tonnes as free sale quota for three months' domestic supply, i.e., July, August and September. Also, the Government extended the validity of June quota till July 15.
Maharashtra had been allotted 10 per cent lower quota of 4.55 lakh tonnes compared to 5.05 lakh tonnes for May.
The Government released national quota of 15 lakh tonnes for the current month against 16 lakh tonnes for May.
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