MUMBAI: Indian sugar futures fell for a second straight session to hit their lowest level in more than 11 weeks on subdued demand amid higher selling by mills to generate cash to pay farmers for their cane.
Sugar prices in India have been falling for the last one month as cane crushing gained momentum after the end of the festival season and mills need money to pay farmers.
At 1050 GMT, the key sugar February contract on the National Commodity and Derivative Exchange (NCDEX) was trading down 0.06 percent at 3,264 rupees after hitting a low of 3,252 earlier in the day, a level last seen on Oct. 23.
Sugar edged down 4 rupees to 3,233 rupees per 100 kg in the Kolhapur spot market in top producing Maharashtra state.
"There could be some recovery in sugar prices after January, when temperatures in northern India start rising," said Pradeep Bhanusali, a trader based in the Vashi spot market near Mumbai.
The government's decision to not to raise import duty on sugar has also dampened sentiment.
Sugar prices are under pressure due to weak consumer demand during the winter season, when buying by soft drink and ice-cream makers usually eases.
Sugar mills are expected to churn out 24 million tonnes in 2012/13, down from 26 million tonnes in the previous year, but higher than the expected local consumption of about 22 million tonnes.
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