Sugar futures declined 0.3 per cent to Rs 3,546 a quintal on Tuesday amid profit booking as the October contract on the NCDEX has gained about two per cent in the last one week. Sugar prices in the Kolkata spot market were up by 0.76 per cent at Rs 3,829 a quintal due to the revival of demand at lower levels.
The expiry of the September sugar contract on Thursday was postponed to Friday on account of a possible closure of the various spot markets due to the strike call given by various political parties.
The Cabinet Committee on Economic Affairs is likely to consider a proposal on Friday to raise sugar prices sold through ration shops. If approved it would be the first hike in about a decade.
The Indian Sugar Mills’ Association has forecast sugar production to fall by 8 per cent at 24 million tonnes in 2012-13 against 26 mt achieved last year.
Sugar futures may gain due to improvement in demand ahead of the festive season. A month-long delay in cane crushing in Maharashtra may also support prices. However, sufficient supplies and improved rains may cap a sharp upside in sugar prices.