Indian sugar futures fell on Tuesday on strong selling by mills amid lacklustre demand in spot market, and in anticipation of the start of cane crushing in top-producing Maharashtra state. Most factories in Maharashtra, the top sugar producer in the country, start cane crushing by the first week of November, but it was delayed this year due to a dispute between farmers and mills over cane prices.
In the northern state of Uttar Pradesh, the farmers and mills are waiting for the state government to announce the state-advised price for cane. The Indian government has asked millers to sell 4 million tonnes of sugar in the open market during October and November, higher than the average monthly allocation of around 1.7 million tonnes. This is also putting pressure on the prices, Desai added.
The key December contract on India's National Commodity and Derivatives Exchange was trading down 1.35 percent at 3,291 rupees per 100 kg. Sugar fell by 2 rupees to 3,473 rupees per 100 kg at the Kolhapur spot market in Maharashtra. India's sugar output in the 2012/13 crop year, which started on October 1, is likely to fall to 23.5-24 million tonnes from 26 million tonnes a year earlier.
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