Sugar prices, spot and futures, may continue to remain firm over the next few days mainly on reports of unviable imports, firm overseas markets and reports of lower domestic supplies.
Sugar M grade 200 (Kolhapur) prices were quoted Rs 50-60 higher to trade at Rs 2,281 for May contracts and Rs 2,408 per quintal for June contracts on NCDEX over previous week due to drop in domestic output and strong international prices.
Global prices rose by 2.5% to trade over 15 cents per pound in past two weeks. Thus, landing cost of raw sugar is higher than the domestic prices. The landed cost of raw sugar in Indian ports will be in the range of $395 a tonne, whereas till now, no mill has contracted at above $330-340. London August white sugar contract moved $8 per tonne higher at $427 per tonne on Saturday.
The ex-factory cost of the processed white (imported) sugar at these rates would be around Rs 24,500 a tonne for mills close to ports and Rs 26,000 for those in Uttar Pradesh, sources said.
Spot prices were quoting higher around Rs 2,236 per quintal in Kolhapur market and Rs 2,490 per quintal in Muzaffar nagar. ?Though domestic futures market showed some weakness last week, prices may continue to trade higher during the current week. Rising international prices are making the imports unviable. Talks of lower yield from Brazil?s central South crop have led New York and Liffe sugar to recover in the past few weeks, an analyst with Angel Commodities said.
?Lower output and unviable imports at current prices are likely to support the domestic sugar prices in the short to medium term with expected target of Rs 2600 per quintal,? analyst said.