India sugar up on festive demand

Indian sugar futures were trading up in choppy trade on Thursday on improvement in retail demand due to festivals, though higher supplies for October and November weighed on the sentiment.

* At 1039 GMT, the key November contract on the National Commodity and Derivatives Exchange was up 0.21 percent at 3,398 rupees ($63.17) per 100 kg.

* Sugar in the Kolhapur spot market in the top-producing Maharashtra state rose by 7 rupees to 3,497 rupees per 100 kg.

* “Supplies are sufficient to meet demand and the prices are likely to remain in this range till Diwali,” said Mukesh Kuwadia, secretary of the Bombay Sugar Merchants Association.

* Indians will celebrate Diwali, or the festival of lights, this month, and demand for sugar goes up during the festive season as the consumption of sweets rises.

* The government has asked millers to sell 4 million tonnes of sugar in the open market during October and November, higher than the average monthly allocation of around 1.7 million tonnes, and this is pressurising the prices despite strong consumer demand, traders said.

* India’s sugar output in the 2012/13 crop year, which started on Oct. 1, is likely to fall to 23.5-24 million tonnes from 26 million tonnes a year earlier.

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