Indian sugar futures fell for a second day on Wednesday, tracking a drop in overseas markets and on concerns over stock limits imposed by the government to discourage hoarding. At 4:11 pm (1041 GMT), the March contract on the National Commodity and Derivatives Exchange was down 0.28 percent at 2,102 rupees ($40.6) per 100 kg, while the April contract had fallen 0.28 percent to 2,160 rupees.
New York's May raw sugar contract dropped more than 7 percent in the past two sessions as crude oil prices fell, diminishing the prospect of diversion of sugarcane for production of biofuel ethanol. India had allowed duty free imports of raw sugar last month for domestic use. Spot prices in the western state of Maharashtra, India's top producer, eased 0.12 percent to 2,111.45 rupees. The government said last week it would impose limits on the amount of sugar that can be stocked by traders, a move aimed at reining in prices ahead of general elections in April and May.
Spot sugar prices in India have jumped 13 percent this year on forecasts of a sharp drop in the output. The farm minister said last week output may be about 16.5 million tonnes, lower than earlier expectations of about 18 million tonnes and much below last year's about 26.5 million tonnes.
Traders said if the government sets limits very low it would lead to higher supplies in the spot market. Soyaoil futures up Indian soyaoil futures rose on Wednesday afternoon as spot prices gained ahead of festivals this month, and tracking firmness in rival palm oil in Malaysia and soyaoil in United States.
At 2:54 pm (0924 GMT), the March futures contract was up 1.45 percent at 453.5 rupees ($8.8) per 10 kg on the National Commodity and Derivatives Exchange. The April contract had risen 1.2 percent to 451 rupees. Soyaoil prices in the spot market in Indore, a hub for soyaoil trade in India, were up 1.01 percent at 40,200 rupees per tonne.
"The demand may be short lived as large quantities of rapeseed oil may soon come in the market," a soyaoil broker in Indore said. Rapeseed arrivals have started to peak and mills have begun producing rapeseed oil, a substitute for soyaoil. May palm oil futures on the Bursa Malaysia Derivatives Exchange were up 2.8 percent at 1,907 ringgit a tonne at 0930 GMT. July soyaoil futures on Chicago Board of Trade were up 1.11 percent to 31.06 cents per pound at 0932 GMT.