June futures hit a contract low of 2,945 rupees earlier this week. “The rising temperature is boosting sugar demand from cold drink makers. It will remain firm at least in the next few weeks,” said Prasoon Mathur, a senior analyst with Religare Commodities.
Demand for sugar from ice-cream and beverage makers typically rises during the summer. “The upside in the June contract would be capped at 3,200 rupees. Sugar supplies are more than demand,” Mathur said. Spot sugar rose 10 rupees to 3,048 rupees per 100 kg in the Kolhapur market in the top-producing Maharashtra state.
India is likely to produce 24.6 million tonnes of sugar in 2012-13, an industry body has said, against an annual demand of about 23 million tonnes. Indian sugar mills produced 24.52 million tonnes of the sweetener between October 1, 2012 and April 30, about 3 percent less than a year earlier, a leading industry body said.