Indian sugar futures were flat on Monday as sluggish demand in spot markets and higher inventory offset hopes demand will pick up from mid-August due to festivals. The key August contract on the National Commodity and Derivatives Exchange was unchanged at 3,027 rupees ($51.32)per 100 kg at 0833 GMT. The contract has been trading in a narrow range of 3,011 rupees to 3,038 rupees for the seventh straight session.
"In spot markets retail demand is weak. We saw few exports deals due to Ramadan, but now overseas demand has also come down," said Ashwini Bansod, a senior analyst at Phillip Commodities India Pvt Ltd. "Carry-forward stocks are much higher than normal. So far, the monsoon rainfall in cane growing areas has been good."
A lack of Pakistani sugar available for exports and strong demand before Ramadan have created opportunities for Indian sales to nearby markets, but the window for foreign sales risks closing soon. Maharashtra and Uttar Pradesh, the top two sugar producers in India, received more rainfall than normal since the beginning of the monsoon on June 1, weather department data showed.
Spot sugar edged down 6 rupees to 3,046 rupees per 100 kg at the Kolhapur market in Maharashtra state. India's sugar output in the 2013/14 marketing year beginning October is likely to drop 5.2 percent from a year earlier to 23.7 million tonnes, compared with a local demand of around 23 million tonnes.
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