Indian sugar futures eased on Monday as sluggish demand in physical market and hopes cane yields will rise due to conducive monsoon rains put pressure on prices, analysts said. India's annual monsoon rains hit the country's southern coast on Saturday, more than a week ahead of the usual date of June 1.
Early rains will ensure the cultivated crop gets adequate irrigation, resulting in better yields, analysts said. The weather department said in April that monsoon this year was likely to be about 96 percent of the long-term average, the weakest in five years. "Stockists are selling in physical market expecting a fall in prices due to imports," said an analyst at Religare Commodities Ltd.
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. 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.
The government may allow imports of raw sugar in the next season that begins in October but it will discourage shipments of white, or refined, sugar Farm Minister Sharad Pawar said on Monday. Prices in the spot market in the western state of Maharashtra, India's top producer, edged down 0.41 percent to 2,259 rupees per 100 kg.
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