MUMBAI, Dec 17 (Reuters) - Indian spot sugar price jumped two percent on Thursday buoyed by improvement in demand, deficit in output for a second straight year and as shortage of rail wagons delayed arrivals of imported sugar in the market, dealers said.
In Kolhapur, a key market in top sugar producer Maharashtra, the price of the most traded S-variety sugar rose 1.94 percent to 3,216.05 rupees ($68.6) per 100 kg.
"Pressure from imports has been eased. Demand has also improved in last two days," said Ashok Jain, president of the Bombay Sugar Merchants Association.
Imported sugar has piled up at ports, particularly in Kandla in western India, because of a shortage of railway wagons and protests against raw sugar imports by farmers in the northern Uttar Pradesh state, government and industry officials say.
Indian buyers have stopped contracting new sugar import deals as local prices are lower than the landed cost of imports, Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories, told reporters on Wednesday.
In the 2009/10 season, lower acreage and poor rains will keep India's output at 15.3 million tonnes, a little more than last year's output of 15 million tonnes, severely short of domestic consumption of about 23 million, for a second straight year, a Reuters poll showed.
Source : REUTERS