Date:28/06/2005 URL: http://www.thehindubusinessline.com/2005/06/28/stories/2005062800551000.htm

Back Govt may cut Q3 free sale sugar quota

Dhimant Bhatt

Mumbai , June 27

THE Union Government may announce lower free sale sugar quota of 33 lakh tonnes for the next three months (July-September) of the current year 2005 as against 39 lakh tonnes for the same period of 2004, according to trade sources.

The total free sale quota of 39 lakh tonnes includes 13 lakh tonnes for July, 11 lakh tonnes for August and 15 lakh tonnes for September 2004 (including additional quota of 3 lakh tonnes).

"Looking at the current season's supply scenario, the Government may continue with lower release of free sale quota for the next quarter also. They actually announced 38 lakh tonnes for April-June 2005 but the total release was 34 lakh tonnes," a local trader said.

The 34-lakh tonnes releasedinclude 11 lakh tonnes for April, 12 lakh tonnes for May and 11 lakh tonnes for June. "If the Government announces lower free sale quota for the next quarter, prices may rule firm during that period as demand increases in August and September because of a series of Hindu festivals," a leading trader said.

Sugar spot prices at the Vashi wholesale market were ruling firm at Rs 1,757/1,787 per quintal for small grade (S-30) and Rs 1,780/1,840 per quintal for medium grade (M-30) on Monday, sources said.

Spot prices for Medium-30 grade at Muzaffar Nagar mandi were quoted at Rs 1,800 per quintal.At NCDEX, futures prices of M-30 grade at Muzaffar Nagar delivery ended higher at Rs 1,808 per quintal for August contracts and Rs 1,819 per quintal for September contracts on June 25.