Indian sugar futures fell on Tuesday due to a lack of physical demand as traders waited on the sidelines expecting spot prices to drop further, analysts said.
At 2:40 pm (0910 GMT), the September contract on the National Commodity and Derivatives Exchange was down 0.15 percent at 1,293 rupees ($31.3) per 100 kg, while the October contract had fallen 0.23 percent to 1,299 rupees.
"Despite good demand at the retail, level traders are not buying today hoping the prices would fall due to pressure on millers to sell about 2 million tonnes of free sugar by September end," an analyst in Ahmedabad said. Even large players were showing little interest in buying, an analyst at IL&FS Investsmart Commodities Ltd said. To regulate supplies and prices, the government sets a free sale quota each month for millers.
For the July/September quarter the government allowed the sale of 4 million tonnes of sugar, including about 400,000 tonnes of carry-forward stocks. However, according to industry estimates only about 2 million tonnes have been sold so far, with the remaining 2 million tonnes to be sold by the end of September.
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