Indian sugar futures extended the previous session's gains on Thursday on an improvement in demand from bulk consumers, though ample supplies capped the upside. The most-active sugar contract for May delivery on India's National Commodity and Derivatives Exchange was 1.19 percent up at 2,984 rupees per 100 kg at 0853 GMT.
"There was an improvement in demand from bulk consumers due to rising temperature," said a member of the Bombay Sugar Merchants Association. Demand for sugar from ice-cream and beverage makers typically rises during the summer. Spot sugar rose 22 rupees to 3,065 rupees per 100 kg in the Kolhapur market in top-producing Maharashtra state. The government's decision to lift some curbs on the industry has been supporting sentiments, dealers said. The government will no longer force mills to sell sugar at a discount and will not limit the amount they can sell in the open market, Food Minister K.V. Thomas said after the cabinet agreed the changes last week.
Sugar mills in India produced 23 million tonnes of the sweetener in the first six months of the current crop year, about 2 percent less than a year earlier. India is likely to produce 24.6 million tonnes of sugar in 2012/13, an industry body has said, against an annual demand of about 23 million tonnes.
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