Indian sugar futures erased early losses to end steady on Friday due to bargain buying, but uncertainty over government policy kept prices under pressure, analysts said. "Lower-level buying is supporting prices. But market is still sceptical about the government moves," Mehul Agrawal, an analyst at Sharekhan Commodities, said.
The final stage of voting in India's closely fought general election ended on Wednesday. Counting of votes is scheduled on Saturday. Agrawal said the sugar policy changes with the government and there was no clear indication which alliance would form the government. The benchmark June contract on the National Commodity and Derivatives Exchange had fallen more than 2 percent in last two sessions.
Prices in the spot market in the western state of Maharashtra, India's top producer, edged 0.4 percent higher to 2,258.9 rupees per 100 kg. Spot traders were awaiting the outcome of the general elections before placing new purchase orders. India's sugar output may fall to 14.8 million tonnes in 2008/09, sharply lower than 26.5 million tonnes a year ago, a top trade official said last month.
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