Sugar spot prices across the country may remain subdued over the next few days on increased supplies by sugar mills amid restricted domestic buying interest, trade sources said. The government has decided to release 52 lakh tonne of free sale sugar for the quarter October-December, 2008 as against 42 lakh tonne made available during the previous quarter (October-December, 2007) of the last sugar season. It includes normal quota (October-15 lakh tonne, November-15 lakh tonne and December-14 lakh tonne), any unsold stocks out of normal quota in October (2 lakh tonne) and 30% of the remaining 75% of dismantled second buffer stock (6 lakh tonne).
?Supply pressure kept sugar spot prices weak across the country. The government has asked sugar mills to get rid of old stock to accommodate new supplies.
On the other hand, fresh buying from bulk consumers and retailers may remain limited,? a local dealer said. The government asked sugar mills to pay Rs 140 per quintal of sugarcane procured from the farmers for the 2008-09 season.
Sugar spot medium grade prices hovered around Rs 1,869-1,870 in Muzaffarnagar, Rs 1,777-1,778 in Kolhapur and Rs 1,835-1,925 per quintal in Vashi (Navi Mumbai) on Tuesday. Sugar (M-grade) December futures prices on the NCDEX platform fell by Rs 30-40 to trade at Rs 1,806 per quintal on Tuesday. ?Increased free-sale supplies will pressurise prices in the short term, but expectations of a 20%-25% cut in sugar output on a decline in sowing may support prices in the medium-term,? an analyst with Angel Broking said.