Indian sugar futures extended the previous session's losses on Tuesday, depressed by sluggish spot demand and hopes of higher imports due to a strong rupee, analysts said. India has allowed imports of raw and white sugar with some restrictions to bridge the gap between rising domestic demand and a fall in supplies due to lower crop.
The Indian rupee rose as high as 47.27 in early trade on Tuesday, its strongest since December 19, at which point it was up 10.4 percent from its record low of 52.2 in early March. "Weather department has predicted early arrival of monsoon and normal rainfall. It is good for cane crop and will increase per hectare yield," an analyst with Bonanza Commodity Brokers Pvt Ltd, said.
India's monsoon rains are expected to hit the southern coast on May 26, five days ahead of the normal date, the weather office said last week. Prices in the spot market in the western state of Maharashtra, India's top producer, fell 1.44 percent to 2,287 rupees per 100 kg. India's sugar output may fall to 14.8 million tonnes in 2008/09, sharply lower than 26.5 million tonnes a year ago, a top trade official said last month. The country's sugar consumption is pegged at 22.5 million tonnes this year.