Sugar spot mart sweetens

COMMODITY SPIKES

The downtrend in sugar took a U-turn in the spot market with prices gaining Rs 25 a quintal over the past two days. Sugar M for mill and naka deliveries shot up to Rs 1,400 and Rs 1,480 a quintal respectively, while sugar S perked up to Rs 1,335 and Rs 1,405 a quintal respectively.

Sentiment in futures, however, remained bearish. While the price for near month contract of M variety on the NCDEX has slumped 5.15 per cent, that on the MCX has plunged 5.6 per cent since the beginning of the month to settle at Rs 1,490 and Rs 1,510 a quintal respectively.

"Despite tremendous pressure to pay sugarcane dues to farmers, mill owners in Maharashtra have decided not to sell sugar below Rs 1,330 a quintal, which indicates that the prices will not fall further," said Rajendra Shah of Hitendra Kumar Takarshi & Co, a Vashi-based trader. "But, if they start dumping below this benchmark, a slide of Rs 50 cannot be avoided," he added.

Prices, during this season, remain depressed owing to abundance of sugar and khandsari "� another sweetener for local consumption.

Hence, the quota of 39 lakh tonne is enough for this season.

The lifting of ban on exports will not prove beneficial at all until the government starts offering transport subsidy. Domestic sugar output is pegged at a record 230 lakh tonne against a consumption requirement of 185 lakh tonne this year. Last season, the total production was 191 lakh tonne.