praveen
20-11-2007, 08:03 AM
Sugar prices have increased both in the spot as well as futures markets on an increase in demand and delayed crushing in Uttar Pradesh.
Spot price of sugar in wholesale market at Muzaffarnagar in UP has gone up by Rs 50 per quintal in the past 15-20 days and is about Rs 1,550 per quintal. The factory price is between Rs 1,380 to Rs 1,410, excluding taxes. Prices have gone up by Rs 10 to Rs 1,310-1,315 per quintal in Kolhapur, Maharashtra.
"Prices have moved up on some demand and delay in crushing by over a month in Uttar Pradesh. Crushing has begun in the government-owned factories while the private mills are expected to start by this month-end or first week of December," said a Muzaffarnagar-based sugar trader. He said prices will not go up once the crushing starts.
In the futures market, the near-month contract hit upper circuit on NCDEX on Monday due to short covering and the last traded price was Rs 1,435. The December contract was up 1% at Rs 1,288 per quintal. The price of December futures contract has moved up by Rs 75 in last couple of months from Rs 1,211 per quintal on September 19 to the current levels of Rs 1,288. The far month contracts were also supported with export orders and the expectation of fresh orders.
Kotak Commodity’s Amol Tilak expects the price of the December contract to rise further. "If the contracts are trading below the fair value of sugar in the spot markets, the future contracts will move up," said Mr Tilak. He said there was a need for a consolidation as the spot market prices are prevailing at fair levels. Prices cannot go down for a long period, he added.
Sugar prices crashed below the production cost due to a record sugar production of over 280 lakh tonnes during 2006-07. Sugar production is likely to cross 300 lakh tonnes during 2007-08.
However, some traders feel sugar prices would move up. A UP-based trader said production will be less compared to the estimates of over 300 lakh tonnes by the government as not much of sugarcane is coming out. "Sugar prices will increase due to delayed crushing and lower then expected production," said the trader.
Spot price of sugar in wholesale market at Muzaffarnagar in UP has gone up by Rs 50 per quintal in the past 15-20 days and is about Rs 1,550 per quintal. The factory price is between Rs 1,380 to Rs 1,410, excluding taxes. Prices have gone up by Rs 10 to Rs 1,310-1,315 per quintal in Kolhapur, Maharashtra.
"Prices have moved up on some demand and delay in crushing by over a month in Uttar Pradesh. Crushing has begun in the government-owned factories while the private mills are expected to start by this month-end or first week of December," said a Muzaffarnagar-based sugar trader. He said prices will not go up once the crushing starts.
In the futures market, the near-month contract hit upper circuit on NCDEX on Monday due to short covering and the last traded price was Rs 1,435. The December contract was up 1% at Rs 1,288 per quintal. The price of December futures contract has moved up by Rs 75 in last couple of months from Rs 1,211 per quintal on September 19 to the current levels of Rs 1,288. The far month contracts were also supported with export orders and the expectation of fresh orders.
Kotak Commodity’s Amol Tilak expects the price of the December contract to rise further. "If the contracts are trading below the fair value of sugar in the spot markets, the future contracts will move up," said Mr Tilak. He said there was a need for a consolidation as the spot market prices are prevailing at fair levels. Prices cannot go down for a long period, he added.
Sugar prices crashed below the production cost due to a record sugar production of over 280 lakh tonnes during 2006-07. Sugar production is likely to cross 300 lakh tonnes during 2007-08.
However, some traders feel sugar prices would move up. A UP-based trader said production will be less compared to the estimates of over 300 lakh tonnes by the government as not much of sugarcane is coming out. "Sugar prices will increase due to delayed crushing and lower then expected production," said the trader.