Sugar spot and futures prices may increase further over the next few days mainly on a revival of physical demand, a sharp rise in overseas market and expected lower output. Sugar spot prices at the Muzaffarnagar wholesale market has crossed Rs 1,900-mark on Monday, on steady buying interest while spot prices of sugar medium grade (M-30) at Vashi market rose by Rs 15 per quintal to trade at Rs 1,895-Rs 1,975 in the last two days. Small grade (S-30) sugar also firmed up by Rs 15 per quintal to Rs 1,871-Rs 1,915 a quintal on steady demand, a local dealer said.
NCDEX sugar futures prices continued its upward march over the past few days, mainly on increased local buying in the physical markets and reports of expected drop in output this season. The price-rise was also due to the High Court rejection of the petition presented by the sugar mills on pricingof sugarcane .
The NCDEX December contract increased by nearly Rs 90 to trade at Rs 1,808 per quintal over past ten days with a business turnover of nearly 3,000 tonne, a tradee at a commodity house said. ?The major factors influencing the market, at present, are the steady increase in local demand in the physical market and a expected drop of 10 % in Maharashtra. However, the current month free sale quota is adequated enough to cater to local demand,? a local trader said.
The government has allocated 14 lakh tonne of sugar for the open market and nearly 2 lakh tonne for the public distribution system (PDS) to cater to domestic demand in December. ?Prices might recover further in the coming days; however, the upside would be limited in the short term, as sugarcane crushing has started all over the country. Crushing has started in full swing and therefore, millers are clearing their old stocks,? an analyst with Angel Broking said.