Indian sugar futures fell on Friday on profit-taking driven by ample supplies, though summer demand and expectations that state governments would soon start buying the sweetener for public distribution system limited the downside. The key June contract on the National Commodity and Derivatives Exchange was down 0.42 percent at 3,067 rupees per 100 kg at 0845 GMT, after hitting a two-month high of 3,091 rupees in the previous session.
"Profit-booking is emerging at higher level. Futures are getting support from summer and wedding season demand," said Prasoon Mathur, a senior analyst with Religare Commodities. Demand for sugar from ice-cream and beverage makers typically rises during the summer.
Spot sugar fell 9 rupees to 3,063 rupees per 100 kg in the Kolhapur market in the top-producing Maharashtra state.
In April, the federal government decided to scrap the levy sugar mechanism, under which mills were obliged to supply 10 percent of their produce at a cheaper rate for the public distribution system. The change will force state governments to buy the sweetener from the open market.
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