Sugar jumps 6%, reaches 2-month

Date 24-Jul-2010        Source THE FINANCIAL EXPRESS        Reporter Reuters        News Id 235

Mumbai: Indian spot sugar jumped 6% to reach the highest level in over two months on Friday as traders raised prices to pass on the hike by millers, three dealers said. In Kolhapur, a key market in top producer Maharashtra, the most traded S-variety sugar jumped 6% to Rs 2,755 ($58.7) per 100 kg, the highest level since May 10. In Vashi, another spot market in Maharashtra, the price climbed by 5.4% to Rs 2,828. Dealers increased prices. They don’t have choice. They are just following millers. If mills are not ready to sell at lower levels, then how dealers can sell it? Ashok Jain, president of the Bombay Sugar Merchants Association (BSMA), said. Millers late on Thursday decided to raise prices of the sweetener by 4 to 6% in an attempt to trim losses after prices fell below cost of production. Bulk consumers were not ready to buy at Rs 2,600. Now mills are forcing them to buy at Rs 2,800. It would be very difficult for mills to generate demand at this level, Jain said. Shares of sugar companies like Bajaj Hindusthan, Shree Renuka Sugars, Triveni Engineering & Industries, Dhampur Sugar rose 1.3 to 3.5% on Friday while the 30-share BSE index ended up 0.1%.