Sugar spot and futures prices are expected to remain weak with bearish sentiments in the short term on huge supply pressure amid steady summer demand from bulk consumers.
Spot and futures prices were remained low during the past one month on enough supplies. Sugar June 2008 contracts on NCDEX were traded around Rs 1,397 per quintal (ex-Kolhapur) and July 2008 contracts were traded around Rs 1,444 per quintal till 5.30 pm on Tuesday. Spot price in Kolhapur market was quoted around Rs 1,376 per quintal on Tuesday. In Vashi mandi, spot prices of small grade (S-30) were traded around Rs 1,457-1,515 per quintal while medium grade (M-30) prices were hovering around Rs 1,480-1,575 per quintal on steady buying by outstation buyers.
The government has fixed free sale quota of 13.5 lakh tonne for the current month. Over and above this quota, the government has also announced that sugar mills can sell 20 lakh tonne from buffer stocks during the May-September 2008 period.
?Free sale quota of 13.5 lakh tonne for June is fair enough for the domestic demand. Sugar futures prices are projected to trade in range bound to negative bias on account of sluggish demand and ample supplies in the market,? a local dealer said.
With the rainfall in Southern Peninsula, sugarcane sowing activities has started and trade sources says that inventories are higher in north Indian market, sources said.