All sugar contracts on National Commodity and Derivatives Exchange ( NCDEX) hit the upper circuit-breaker of 3%, the maximum allowed from the previous close in a single session, during Monday’s trading session, because of continued buying support from traders ahead of festival season.
The prices of sugar contracts for delivery in August rose 3% to Rs 1,827 a quintal. September contracts moved up a little over 3.25% to Rs 1,859 a quintal over the previous day. October contracts also shot up by nearly 3.50% to trade at Rs 1,893 per quintal (till 4.30 pm) on continued buying support amid limited offerings.
In the Vashi APMC market, located in Navi Mumbai, the spot price of sugar for small grade rose Rs 40 to Rs 1,920-1,950 per quintal over the previous day. Medium grade prices increased Rs 30 to Rs 1,940-2,010 per quintal.
?The local demand is good and the overall supply from sugar mills is limited. The government has released five lakh tonne of additional free-sale quota on Saturday but it is less than what the market expected,? a local trader said.
The government had earlier announced the total free-sale release of five lakh tonnes for August-September period. Of this, it released two lakh tonne of additional sugar, over and above the regular free-sale monthly quota of nine lakh tonne fixed for the current month, keeping in mind a series of festivals later this month. The government also allowed mills to sell three lakh tonne more for the next month.
?I believe the total quota released for this month is lower than the demand we expect for the month, and prices may stay higher as some mills are holding stocks,? he said. Wholesale prices have increased nearly Rs 400 a quintal over the past ten days.