Indian sugar futures rose on Monday tracking gains in the physical market and after the government released a smaller than expected quota for sale in the free market in January, analysts said. At 2:53 pm (0923 GMT) the January contract on the National Commodity and Derivatives Exchange was up 0.68 percent at 1,337.00 rupees ($33.92) per 100 kg.
February contract was up 0.52 percent at 1,351.00 rupees. Sugar trading in India is controlled by the government, which sets a monthly quota millers can sell without price restrictions.
The government on Monday released 1.3 million tonnes of non-levy (free sale) sugar for January, the same amount it had released for December. Traders had been expecting an increase in the January quota as carryover stocks from December are expected to be lower, said Veeresh Hiremath, an analyst at Karvy Comtrade.
Analysts said demand and prices had improved slightly in the spot market and that was supporting futures. Prices in Kolhapur, a hub for the sugar trade in the western state of Maharashtra, have risen 27.50 rupees to 1,337.50 rupees per 100 kg in the last five days.