Sugar futures and spot prices are expected to rule firm in the next few days in anticipation of lower sugar crop for the current season amid steady demand from bulk consumers.
The January 2008 contracts for sugar medium grade (ex-Muzaffarnagar) on NCDEX have jumped by nearly Rs 100 per quintal to trade at Rs 1,429 per quintal on Wednesday during the current month on continued support while February 2008 contracts for medium grade (Kolhapur) also gained by about Rs 120 per quintal to trade at Rs 1,470 per quintal on Wednesday during the current month.
?Spot and futures prices have fallen marginally in last two days mainly on the announcement of one lakh tonne of additional quota for the current month but prices have again recovered from the lower level after the government announced 8% fall in sugar production,? a local trader said.The agriculture minister Sharad Pawar has recently said that the sugar production for the year 2007-08 would be around 260 lakh tonne, down by 8% from previous year. This statement offset the downside risk to the prices caused by the announcement of additional free sale quota for the current month.
The government released one lakh tonne of additional free sale quota. Of this, Maharashtra state would be allotted about 40,000 tonne.
Spot prices in Vashi fell by about Rs 10-15 per quintal in last two days on the news of additional quota released by the government but prices recovered later Thursday due to continued buying from bulk consumers.