Indian sugar futures fell on Wednesday on expectations the government would allow more supplies to cool soaring prices. At 3 pm (0930 GMT), the benchmark September contract, which had jumped 8 percent this month, was down 0.43 percent at 1,847 rupees ($43.2) per 100 kg. The current month contract, which expires on August 20, fell 0.92 percent to 1,835 rupees.
Spot prices in Maharashtra, the country's biggest sugar producing state, fell 1 percent to 1,896.75 rupees after rising more than 15.7 percent this month. Last Saturday, the government released an additional 200,000 tonnes of sugar to the monthly quota of 900,000 tonnes for August, but the move failed to halt the runaway rise in prices ahead of a series of festivals when demand soars.
"I would expect the government to release more sugar in the open market," said Raj Kishore Baruah, an analyst in Sushil Global Commodities Pvt Ltd, adding rising inflation was a concern for the authorities. India's annual inflation is expected to have risen to 12.21 percent in early August, the highest in more than 13 years, a Reuters poll showed. The government controls the sector by fixing quantities each mill can sell in the open market.