Indian sugar futures were mixed on Friday as an expected bumper crop came back to haunt traders, after a rally the previous day following an increase in the buffer stock. Soyaoil slipped tracking the trend in Malaysia where palm oil was weak due to falling exports and rising supplies.
By 0933 GMT, July sugar futures on the National Commodity and Derivatives Exchange (NCDEX) were up 2 rupees at 1,314 per 100 kg, while August futures eased 1 rupee to 1,338.
Sugar could come under pressure unless the government gave incentives for raw sugar exports and allowed mills to produce ethanol, an alternative fuel from sugarcane juice rather than molasses, a by product, a dealer said.
Sugar output in India is likely to touch a record 28 million tonnes in the sugarcane season that ends in September, up from 19.3 million tonnes last season, according to government estimates, against annual consumption of 19-20 million tonnes.
On Thursday, the government raised the quantity of sugar that can be kept in reserves to 5 million tonnes from 2 million tonnes to ease the pressure on millers weighed down by a glut and falling prices.
Soya was down as the contracts in Malaysia, the world's top palm oil producer, fell on fears of sluggish exports and improved supplies. The July soyaoil futures on the NCDEX were down one rupee at 489.10 rupees per 10 kg, while August futures dropped 1.75 rupees to 493.85.
Soyaoil prices generally track the Malaysian trade. Prices of palm and soyaoil usually move in tandem as both are used in same products ranging from lipsticks and bread to biofuels.
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