More quota sought to ease sugar prices

If special quota is not released, prices may rise further by Rs 100

In a bid to tackle sugar price rise, traders are demanding the release of 1,00,000 to 1,50,000 tonne of special quota of sugar for Maharashtra.

Sudden spurt in demand from the North East coupled with support from fund buyers in spot as well as futures markets has pushed sugar prices up by about 5 per cent in the last 20 days.

Presently, sugar prices at the APMC is quoted at Rs 1,940 to1,985 (M30) and Rs 1,930-1,940 (S30) per quintal. Ready sugar softened by Rs 15 in early trade but recovered by late afternoon with bullish sentiment still prevailing in the market.

For mill delivery, S30 is sold in the range of Rs 1,818-1,828 per quintal. Yesterday it was Rs 1,840-1,850 per quintal. M30 is quoted in the range of Rs 1,887-1,905 per quintal while yesterday it was Rs 1,900-1,925.

For naka delivery, S30 was sold in the range of Rs 1,895 - Rs 1,910 per quintal ( Rs 1910 - Rs 1,925) while M30 was quoted between Rs 1960 - Rs 1975 per quintal (Rs 1,975 - Rs 1,990).

"Stockists are holding the key of the market'', Rajendra Shah of Hitendra Kumar Takarshi & Co. said. He added that the continuous rise in prices has kept traders away from the market.

Generally, sugar prices decline this season but this year it has increased by Rs 100 which is partly attributed to the announcement made by Agriculture and Food Minister Sharad Pawar about the country's plan to export sugar.

"New quotas for the next month are released by the month-end. Therefore, small stockholders sell their reserves. But, if special quota is not released, then the sugar price may go up further by Rs 100 before the end of the current month," Ashok Jain, secretary, Bombay Sugar Merchant Association, said.

The bullish trend still continues and large stockists are firm on fresh bookings. Hence, prices are expected to remain high in the near future. The benchmark March contract, in London, climbed to $422 a tonne on Monday, a gain of $21 from Friday.

This was the highest rise since April 1996. Rising demand and a global supply deficit are spurring buying. Investment funds are also pouring money into commodities, especially sugar.

Sugar production in India is estimated to touch the 18 million mark, equivalent to consumption, with a carryover of 4.5 million tonne.

Thus, during the next year, open stocks are expected to remain at around 4.5 million tonne which would not have any impact on current prices, experts said.