Indian sugar futures rose on Monday after hitting their lowest level in 8-1/2 months on bargain buying, driven by expectations of an improvement in demand due to the summer. The key May sugar contract on India's National Commodity and Derivatives Exchange was up 0.54 percent at 2,996 rupees ($55.14) per 100 kg at 0958 GMT, after falling to 2,975 rupees earlier in the day.
Demand for sugar from ice-cream and beverage makers typically rises during the summer. However, so far this year, the demand is subdued. India, the world's second-biggest producer of sugar after Brazil, has been exploring options to free up the sector from various controls to avoid cycles of oversupply and shortage.
The Indian cabinet was expected to take a decision on the decontrol last week, but it did not discuss the topic. The South Asian country is likely to produce 24.6 million tonnes of sugar in the current crop year ending September 30, versus its local demand of about 23 million tonnes. Spot sugar fell 10 rupees to 3,061 rupees per 100 kg in the Kolhapur market in top-producing Maharashtra state.
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