Indian sugar futures hit contract low on rising supplies

Indian sugar futures extended last week's losses to hit a contract low on rising supplies amid sluggish demand and a delay in removing curbs on the sugar industry. As of 0921 GMT, the key March sugar contract on India's National Commodity and Derivatives Exchange was down 0.20 percent at 2,998 rupees ($54.60) per 100 kg, after hitting a contract low of 2,986 rupees earlier on Monday.
"In spot market demand is still weak. Bulk consumers were expected to raise purchases, but still we haven't seen significant rise in demand," said Vedika Narvekar, a senior analyst with Angel Commodities Broking. "Traders were expecting the finance minister would lift some curbs on sugar industry while presenting budget for next year. It didn't happen. Now they are getting out of the market." Last week, Finance Minister P. Chidambaram presented the federal budget for 2013/14 fiscal year. India, the world's second-biggest producer of sugar after Brazil, has been exploring options to free the sector from various controls to avoid cycles of oversupply and shortage. Spot sugar nudged up 3 rupees to 3,169 rupees per 100 kg in the Kolhapur market in top-producing Maharashtra state.