The Hindu Business Line : Sugar may spurt on lower supply

The Government on Wednesday announced a free sale quota of 34 lakh tonnes for the first quarter of 2005, against 34.05 lakh tonnes released last year.

"What the Government has announced is below market's expectation. Traders were expecting higher free sale quota of 35 lakh tonnes for the next three months looking at the sustained demand situation,'' a local trader said.

Spot prices have moved up smartly by about Rs 25-35 per quintal in a single day on a lower quota announcement, a trader said.

"Prices may firm up further by about Rs 18-20 per quintal in the next one week and fresh mills tenders in the beginning of next month are expected to open with premium of about Rs 30-50 per quintal over current prices," another trader said.

"Prices have so far moved up by Rs 150-200 per quintal in both the grades in last one month," he said.

Spot prices of Medium grade-30 in the Vashi wholesale market were higher at Rs 1,784/1,835 per quintal quoted on Wednesday compared to Rs 1,611/1,693 per quintal a month ago, up by Rs 142 per quintal. Small grade-30 prices also shot up Rs 210 at Rs 1,770/1,835 per quintal from Rs 1,580/1,625 per quintal month ago.

Earlier, the Government announced 40 lakh tonnes of free sale quota for the last quarter (October-December) of 2004 due to festivals months. Of which, the Government released 39 lakh tonnes that include 15 lakh tonnes for October, 13 lakh tonnes for November and 11 lakh tonnes for December, sources said.