Indian December sugar futures fell on Friday as millers started delivering in far-month contracts, but a sharp drop in inflation raised the prospect of tighter supplies and capped losses. At 1:54 pm (0824 GMT), the December contract on the National Commodity and Derivatives Exchange was down 0.39 percent at 1,806 rupees ($36.6).
The January contract had eased 0.11 percent to 1,873 rupees, while the November contract, which expires on November 20, was nearly flat at 1,765 rupees. "Lower inflation will decrease the pressure on the government to increase supplies ... traders would look to push up prices," Raj Kishore Baruah, an analyst in Sushil Global Commodities Pvt Ltd, said.
Data released on Thursday showed inflation dropped sharply to its lowest in six months at 8.98 percent in early November as prices of metals and fuels fell. The government controls the sugar sector and fixes quarterly and monthly quantities that each mill can sell in the open market.