(Updates to close)
MUMBAI, April 8 (Reuters) - Indian sugar futures extended gains to hit new contract highs on Wednesday, bolstered by a downward revision in output estimates and a firm spot demand from bulk buyers.
India’s sugar output will fall to 14.2 million tonnes in 2008/09, down 8.4 percent from previous estimates, as lower cane availability forced mills to end crushing earlier than expected, a top trade official said late on Monday. See [ID:nDEL246066]
“Positive sentiment is prevailing in the market due to lower output numbers,” Ashwini Bansod, a senior analyst at MF Global Commodities India Ltd, said.
“Besides, traders are expecting until new government comes into the power, there would be no new decision to curb prices.”
Talk of duty-free imports, which were previously depressing prices, has also faded after G.K. Pillai, trade secretary, said on Saturday that the government is unlikely to allow zero-duty white sugar imports before general elections end in May.
The benchmark May contract NSMK9 on the National Commodity and Derivatives Exchange hit a new high of 2,312 rupees per 100kg.
Spot prices in the western state of Maharashtra, India’s top producer, jumped 3.16 percent to 2,244.6 rupees, taking gains to over 13 percent in the last ten sessions.
Cold-drink and ice-cream makers are main buyers of the sweetener. They usually step up purchases during the summer.
Gains were capped by a likely rise in supplies from imports of raw sugar, traders said.
Indian sugar millers are likely to import 1 million tonnes more raw sugar in the next 8 months as a stronger rupee and rising local prices make imports viable again, the managing director of India’s largest sugar refiner said on Friday. [ID:nBOM464276]
Following are the closing prices of sugar futures in rupees per 100 kg on the National Commodity and Derivatives Exchange <0#NSM:>
Contract Reuters Code Closing Price Change in %
April NSMJ9 2,187 0.88
May NSMK9 2,280 0.31
Reporting by Rajendra Jadhav; Editing by Prem Udayabhanu
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