Indian sugar futures rose on Friday on bargain buying, prompted by an estimated sharp drop in output, but hopes cane yields will rise due to good monsoon rains weighed on prices, analysts said. 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.
"Demand is not there in the spot market. Futures are going up only because of lower level buying," Mehul Agrawal, an analyst at Sharekhan Commodities, said. The benchmark June contract on National Commodity and Derivatives Exchange had lost 3 percent in last four sessions.
Prices in the spot market in the western state of Maharashtra, India's top producer, eased 0.24 percent to 2,268.3 rupees per 100 kg. India's annual monsoon rains may reach the south-western state of Kerala between May 23 and 25, ahead of the normal date of June 1, the weather department said on Wednesday.
In April, it had said the June-September monsoon was likely to be 96 percent of the long-term average. A strong rupee, that makes imports cheaper, also put pressure on prices, they added. India has allowed imports of raw and white sugar with some restrictions to bridge the gap between rising domestic demand and a fall in supplies due to lower crop.
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