India's Maharashtra Mills Sell 12,500 T Sugar For Exports-Sources.

Co-operative mills in India's Maharashtra state have sold more than 12,500 tonnes of sugar at 29,000-29,300 rupees ($644-$651) per tonne to exporters, getting a premium over London white futures, company officials and traders said on Friday.

The mills in the country's biggest producing state have permission to export the sweetener under the Open General Licence (OGL) scheme which is not linked to previous imports.

But instead of selling directly to overseas buyers, these mills sold to exporters based in Mumbai and Pune, as the quantity they had for export was too small to be commercially viable.

"We have sold over 1,300 tonnes of sugar at 29,200 rupees (per tonne) after scrutinizing five bids," said the head of the sales division at a co-operative sugar factory based in Satara, Maharashtra.

India has allowed exports of 500,000 tonnes of sugar following a bumper crop under the OGL scheme.

Around 91,000 tonnes of Indian sugar approved for sale under the scheme have been sold at premiums of less than $50, industry sources at a conference said on Friday.

"We are getting good prices in exports. For the local market, the ex-factory price is around 26,400 rupees per tonne. We are getting nearly 3,000 rupees higher per tonne from exports," said the managing director of another co-operative sugar factory based in Karad, Maharashtra.

The south Asian country is likely to produce 24.2 million tonnes of the sweetener in 2010/11, higher than its annual demand of about 22 million-23 million tonnes.

Nearly 90 percent of sugar factories in the state are co-operative mills, owned by farmers.

London August white sugar futures LSUc1 were trading up 0.68 percent to $606.2 per tonne at 1109 GMT.

"Prices in the world market have fallen sharply in the past two months. We could have earned more profits had the government allowed exports in February," said a senior official at Maharashtra State Cooperative Sugar Factories Federation.

In February, the London sugar futures contract traded at over $750 per tonne.

Source : in.reuters.com