Indian January sugar futures rose on Thursday, following a drop in output in a leading producing state. The market was also underpinned by last week's court ruling in favour of higher cane prices for farmers. At 3:24 pm (0954 GMT), the January contract rose 0.16 percent to 1,912 rupees ($40.7) per 100 kg on the National Commodity and Derivatives Exchange.
Millers in the western state of Maharashtra produced 1.21 million tonnes of sugar in the current season up to December 10, down 16.6 percent from the same period a year ago, a senior official said last week. "The recovery rate has fallen in Maharashtra and that is cutting its production," said Vandana Bharti, a senior analyst at SMC Comtrade.
The lower output will affect India's total production and should support prices, traders said. India is expected to produce around 20 million tonnes of sugar in the crop year to September 2009, down from 26.5 million tonnes a year earlier due to delays to crushing and lower recovery levels. The December futures contract, which expires on Friday, was steady at 1,785 rupees. Spot prices in Maharashtra was steady at 1,870 rupees, after rising more than 5 percent this month.